We say goodbye to 2021 with mixed feelings of sadness and joy. “Sorrow”, because the year was marked by an unprecedented peak of the COVID-19 pandemic and “joy”, because it marked the end of the peak, due to vaccinations and socio-economic restrictions .

In short, 2021 has taught us all to be vigilant and to manage adversities. It didn’t stop there. The year 2021 marked the start of a third wave, with the emergence of a newly mutated variant, Omicron. With the start of the new year, it is important to look back and learn from the major socio-economic events of 2021.

2021 started on a hopeful note, with the promise of vaccination. We must recognize the laudable efforts of scientists, doctors, nurses, police and frontline combatants.

However, with lockdown restrictions easing and skepticism and criticism prevailing over vaccination, the response to India’s inoculation campaign has remained largely a wet squib.

This led to the emergence of the second “deadly” wave from March 2021 to June 2021. However, after the second wave, the situation improved. So what are the lessons of this experience for India?

Data and analysis

In this context, we at the Indian Institute of Science have carried out a quantitative assessment of indicators relating to vaccination, infection rate and socio-economic indicators. These included the Stringency Index, Purchasing Managers Index (PMI) and Consumer Confidence Index (CCI).

Conventional statistical techniques, including correlation, regression and time series, were used on these variables from Oxford University’s Our World in Data enterprise.

In the analysis, shown in the figure below, the vaccination rate indicates the percentage of the fully immunized population in India. The infection rate is measured by the percentage of positive cases out of the total number of tests.

The stringency index measures the intensity of the restrictions imposed in the country. The PMI, administered by information provider IHS Markit, is the forward-looking indicator of producers’ optimism about order books.

Finally, CCI, administered by the global research association The Conference Board, indicates the level of optimism consumers have about their expected financial situation. Generally speaking, PMI and CCI indicate economic health, the former from the perspective of producers and the latter from the perspective of consumers.

Importance of vaccinations and restrictions

In a democratic country like India, local and national restrictions (such as lockdowns and limited capacity operations in institutions) seemed strange, but were implemented at different levels and times.

The stringency index, which indicates the intensity of these restrictions on economic activities, began to ease from the beginning of 2021. The easing continued until March 2021.

This relaxation, combined with festivities and mass gatherings, caused the second wave from March 2021. This led to an unprecedented high infection rate (a positivity rate of more than 15%) and a deterioration economic health, as indicated by the nose-down PMI and CCI (both below 50, indicating economic contraction).

Restrictions began to tighten from March 2021. But it was too late to curb the spread. Vaccinating less than one percent of the population could do nothing about it.

The inoculation rate was boosted by the persistent efforts of frontline workers and reached 4% in June 2021. Besides vaccination, the restrictions also helped contain the viral spread, which cooled down in June 2021.

After June 2021, economic indicators started to improve, as indicated by a slight rise in the PMI and CCI. From July 2021, the PMI and CCI started to move above the 50 level, indicating an economic recovery, but at a moderate pace.

All this clearly proves that vaccination has played a vital role in India’s ‘infected’ socio-economic scenario. It can be observed that increased vaccination levels helped contain the infection and subsequently ease restrictions, which, in turn, boosted economic health.

To this end, we extended our analysis to quantify the impact of inoculation on infection rates and restriction levels.

We analyzed the correlation between daily vaccination as well as the infection rate (COVID-19 positive rate when tested) for the post-second wave period (i.e. from July 2021) when the data are stable and free of outliers.

We found a statistically significant (95%) inverse correlation between vaccination and infection rates. In addition, each percentage increase in vaccination reduces the infection rate by 0.05%, indicating that lives are saved.

Similarly, we analyzed the correlation between the daily vaccination rate and the rigor index. We found a statistically significant inverse correlation (87%) between these. Each percentage increase in vaccination eases the restriction by 1.17 index points, indicating a slowdown in economic activities.

Overall, it can be statistically said that vaccination is effective in mitigating infection and easing restrictions on the economy. Together, these elements contribute to building consumer and producer confidence, the two vital agents of our demand-driven economy.

Go forward

Inoculation is therefore an important instrument to manage the pandemic induced by COVID-19. It is essential to increase the vaccination rate as well as the booster doses to fight against SARS-CoV-2.

If we continue with the current month’s vaccination growth rate of around 1%, we will be able to vaccinate the country by March 2021.

In addition to boosting inoculation, it’s also important to focus on three things learned from the past year: 1) Reinforcement of memory 2) Reinforcement of infrastructure and 3) Timely restriction. We must remember the loss of lives and livelihoods during the last infectious wave and strictly continue to adopt COVID-19 appropriate behavior. We observed the importance of health infrastructures during the second wave.

It is essential to develop, support and improve our health facilities and our health workers to be ready to face future uncertainties. Finally, local restriction requirements, where essential, must be assessed and announced in a timely manner before it is too late.

Late announcements of restrictions lead to infection severity and tighter restrictions. In short, prevention is better than cure. Let’s learn the lessons of 2021 and apply the lessons for a better 2022.

(Swapnil Soni is Senior Researcher, Department of Management Studies, Indian Institute of Science, Bangalore. The opinions expressed are those of the author and do not necessarily reflect those of Down To Earth)