Subject: Governance

The article deals with the issues of different prices set for the Covid vaccine and its implications.

Understanding the positive and negative externalities

• Vaccines have a positive externality; it is a good whose consumption benefits not just the one who has it.
• A vaccinated person is not only relatively protected against the disease himself/herself, but also less likely to transmit it to others.
• Usually, a person getting vaccinated takes into account only his/her own cost and benefit, while ignoring the fact that he/she lowers the chances of infecting others.
• It is the opposite of smoking, which has “negative externality”.
• Since every individual ignores the full set of benefits/costs from consuming goods with positive/negative externalities, the market isn’t always the most efficient mechanism for allocation of such goods.
• That is a key reason why governments treat goods having large positive externalities as “public goods” and provide these while factoring in the full costs and benefits to society.

Analysing the issues with vaccine policy

1) Vaccine inequality

• It requires vaccine manufacturers to supply 50 per cent of their production to the Centre at controlled prices, while allowing them to sell the remaining half in the open market including to state governments at pre-announced “self-set” prices.
• To start with, the new policy can lead to differential access to the vaccine.
• Manufacturers are supposed to “transparently declare” their prices in advance for their 50 per cent supply to the open market.
• But there is no limit per se on the retail price they would charge.
• This could lead to a whole range of prices and vaccine inequality, apart from diversion of supplies from the controlled low-price government centres to the open market.
• So, we may well have scarcity in the “mass” segment co-existing with a glut in the “elite” segment.
• There is also concerns about economic efficiency and the potential for market failure.

2) Economic efficiency and potential for market failure

• Imagine there are two sets of people in India.
• The first consists of those who are better off and can afford to stay back or work from home.
• This lot is also less likely to cause infection to others.
• The second set is mostly blue-collar workers, small traders, vendors and agriculturists.
• The nature of their work — on the shop floor or in the field — makes them naturally prone to infect others.
• It follows, then, that society gains from first vaccinating the latter, as they have a higher negative externality.
• The market will ignore those with lower purchasing power, despite them having a higher probability of spreading the disease.
• In fact, the bigger the income difference between the two segments, the greater will be the extent of market failure from simultaneous over-provisioning and under-provisioning.

Way forward

• The solution could be a single price to be paid to vaccine makers for all the doses that they supply.
• The price should be high enough to stimulate them to rapidly ramp up production.
• Those government should pay directly to the vaccine maker or the hospital administering the dose for those without sufficient means.
• The suggested solution is similar to the fertiliser subsidy, which is now disbursed to companies only after actual sales to farmers.

Consider the question “What policy should be followed for the vaccination in the country? What are the issues with the curent policy which involved different price for government and for open market.”

Conclusion

A single price for Covid-19 vaccines will stimulate production, ensure efficient vaccination.

The article suggests the need for reforms in the process of appointment to the police chief to ensure the political neutrality of the police.

Process of appointing and removing police chief

•  A crucial way in which governments exercise control over the State police is through their unregulated power to decide who the chief will be.
• There is no independent vetting process to assess the suitability of qualified candidates, and the government’s assessment, if it is done at all, remains opaque and is an exercise behind closed doors.
•  The moot reform issue is in ensuring the right balance between the government’s legitimate role in appointing or removing the police chief with the need to safeguard the chief’s operational autonomy.

Need for reforms

Two elements are vital to reforms in this area.

1) Shift the responsibility to independent oversight body of which government is one part

• The National Police Commission (NPC) (1979), and the Supreme Court in its judgment in 2006, in the Prakash Singh case suggested establishing a state-level oversight body with a specified role in the appointment and removal of police chiefs.
• While the Supreme Court entrusted the Union Public Service Commission (UPSC) with a role in shortlisting candidates from which the State government is to appoint the police chief.
• However, the Model Police Bill, 2015 places the responsibility with a multiparty State Police Board, also referred to as the State Security Commission (SSCs) instead.

No compliance with SC directive in the formation of SSC

• While 26 States and the Union Territories have established SSCs, not a single one adheres to the balanced composition suggested by the top court.
• Some do not include the Leader of the Opposition; others neither include independent members nor follow an independent selection process of the members.
• In essence, the commissions remain dominated by the political executive.
• Moreover, in as many as 23 States, governments retain the sole discretion of appointing the police chief. Assam, Jharkhand, Karnataka, Meghalaya and Mizoram are the only States where, on paper, the SSC is given the responsibility of shortlisting candidates.

2) Need for transparency

• The second element critical to police reforms is instituting an independent and transparent selection and decision-making process around appointment and removal, against objective criteria.
•  On appointments, the Court and the Model Police Act require the UPSC/SSC to shortlist candidates on the basis of length of service, service record, and range of experience and a performance appraisal of the candidates over the past 10 years.
• However, no further guidance has been developed on explaining these terms or specifying their elements.
• Similarly, no scrutiny process has been prescribed to justify removals from tenure posts.
• The National Police Commission had required State governments to seek the approval of the State Security Commission before removing the police chief before the end of term.
• This important check was diluted under the Prakash Singh judgment that only requires governments to consult the SSC.
• Most States omit even this cursory step.
• The Supreme Court has rightly emphasised that “prima facie satisfaction of the government” alone is not a sufficient ground to justify removal from a tenure post in government, such as that of the police chief (T.P. Senkumar vs Union of India, 2017).
• The rule of law requires such decisions be for compelling reasons and based on verifiable material that can be objectively tested.

Way forward

• Clear and specific benchmarks need to be integrated into decision-making processes, both on appointments and removals, to prevent politically motivated adverse actions.
• In improving transparency the United Kingdom provides a useful example by introducing public confirmation hearings as an additional layer of check for the appointment of the heads of their police forces.

Consider the question “Examine the status of compliance of the states to the directives of the Supreme Court with respect to the constitution of State Security Commission in the Prakash Singh case.”

Conclusion

Reforms are needed on urgent to ensure fairness in administrative decisions and to protect the political neutrality of the police. Any further delay in implementing reforms in this area will continue to demoralise the police and cripple the rule of law.