THREAD: 1n the state has browbeaten this “philanthropic gesture” out of him. But different pricing slabs were & are a sure fire market distorter. Why? There are 2 accepted pricing structures

cost+ (where the Gov allows a profit margin) &

Market (free demand supply fluctuation) https://twitter.com/adarpoonawalla/status/1387379373452390409

2n the former ensures stability - the latter does not. But where does a variegated pricing structure fit in India? Even in OECD countries these are prone to heavy manipulation - but in a 3rd world country with notoriously corrupt babus, this is an open licence to bribe & distort

3n What happens is SII sells its 50% quote to the states at Rs 300 - but bribes babus and leaders to stall/delay supply. Meanwhile demand only gets more - so the Rs600 vaccines are the only ones keeping pace with demand. Consequently black marketing also sets in. Mind you it’s

4n not that the state isn’t vaccinating, but the state is so big there are literally hundreds of thousands of babus who can be bribed to slow/stall the Rs300 vaccine distribution at any stage. IE Too many failure/compromise points. So the state ends up wasting a huge stock that

5n it has paid for, while the process with the ₹600 vaccine supply is smooth and corners the market both out of availability & desperation. Want proof? Look at the MSP stocks of grain that rot in government warehouses every year https://www.indiatoday.in/india/story/in-6-years-over-40-000-tonnes-of-food-grains-damaged-in-fci-godowns-1696650-2020-07-03

6n grain is a classic case of such variegated pricing - where government MSP and market prices are different. Clearly the decision makers in this government are too dumb to realise this - even though through the #FarmBills2020 they’ve been trying to fight much the same syndrome

7n of course in India we know stupidity is merely a mask for corruption. The people who decided this variegated pricing aren’t stupid - they’re most probably on the take, or intend to be on the take - just like the political-bureaucratic-mandi owner/agent networks in Punjab

8n Mind you this isn’t the first instance of such price control stupidity. That was the stent disaster where an allegedly “well intentioned” but economically clueless government has sent stent prices sky high. Mind you the dunce (or crook?) of a health Secretary then retained his

9n job and the current dunce (or crook?) will also retain his job. It’s quite understandable for a government to repeat the mistakes of a different government, but for a government to repeat its own mistakes shows amateurishness, cognitive dissonance, economic illiteracy & policy

10 cluelessness - but most dangerously an echo chamber where failure is never reported back and used to course correct. You can of course attribute this to incompetence- but after 7 years of your argument is still one of incompetence it doesn’t say much for your intelligence

11 Of course in India there is a high likelihood that this is corruption. But that again doesn’t say much for the cabinets collective wisdom if they can’t see corruption masked as incompetence after 7 years in government. All up the economically clueless dunces on the right

12 “celebrating” SII’s “philanthropy” don’t realise that the incentives for SII to distort the system just rose by a few thousand crores. Similarly the duffers on the left celebrating their “victory” - just ensured SII will in all likelihood end up making a much bigger profit now