1. CJI nominates four vacation Benches

More Benches to be constituted

Chief Justice of India N.V. Ramana on Friday nominated four separate Benches of the Supreme Court to sit consecutively in May, during the first part of the summer holidays, to hear extremely urgent cases. More Benches would be constituted for the second and third parts of the holidays until the court re-opens on June 28. The Vacation Benches will hear the cases virtually.

The decision to have two separate Division Benches sitting in a week during vacations is significant considering the fact that petitions may be filed concerning COVID management and connected human rights issues.

“Under Rule 6 of Order II of the Supreme Court Rules, 2013, Hon’ble the Chief Justice of India has nominated Division Benches for hearing extremely urgent miscellaneous matters during the summer vacation for the period (first part) from May 10, 2021 to May 25, 2021,” the SC circular said. The Benches will assemble twice every week on Tuesdays and Fridays. A Bench of Justices U.U. Lalit and B.R. Gavai and another Bench of Justices Vineet Saran and Dinesh Maheshwari will be the first to assemble during the holidays. These Benches will be available from May 10 to May 16.

Vacation Bench

• A Vacation Bench of the Supreme Court is a special bench constituted by the Chief Justice of India.
• The court takes two long vacations each year, the summer and winter breaks, but is technically not fully closed during these periods.
• Litigants can still approach the Supreme Court and, if the court decides that the plea is an “urgent matter”, the Vacation Bench hears the case on its merits.
• While there is no specific definition as to what an “urgent matter” is.
• During vacations the court generally admits writs related to habeas corpus, certiorari, prohibition and quo warranto matters for enforcement of any fundamental right.

Legal Provisions for Vacation Bench

• Under Rule 6 of Order II of The Supreme Court rules, 2013 the CJI has nominates the Division Benches for hearing of urgent miscellaneous matters and regular hearing matters during the summer vacation for the period.
• The rule reads that CJI may appoint one or more Judges to hear during summer vacation or winter holidays all matters of an urgent nature which under these rules may be heard by a Judge sitting singly.
• And, whenever necessary, he may likewise appoint a Division Court for the hearing of urgent cases during the vacation which require to be heard by a Bench of Judges.

2. ‘Almost half new cases rural, shots key’

SBI’s researchers say economic activity has taken a severe hit as the spread of COVID infections widens

The pandemic’s second wave has spread far beyond the worst-hit cities, with almost half the new cases being reported from rural districts, and economic activity has taken a ‘severe hit’ SBI’s economics researchers said in a report on Friday.

Red-flagging the slowing pace of vaccinations, which has fallen to an average 17 lakh per day from 28 lakh in April, State Bank of India’s research team observed that vaccinations were the primary tool to reduce the severity of infections and India ‘must vaccinate its people on a mission mode, even if it means suspending economic activity for a while after the second wave subsides’.

With daily cases of more than 3.5 lakh in the past nine days, the share of the top 15 districts in total new cases had dropped sharply from 55% in March to just 26.3% in May, suggesting the spread of infections was now far more widely dispersed, SBI group chief economic advisor Soumya Kanti Ghosh wrote.

Terming the increase in rural infections, flagged earlier by micro-finance lenders to the RBI, as ‘worrying’, Mr. Ghosh said the share of rural districts in new cases had increased to 48.5% in May, from 36.8% in March.

‘Mid-August low’

“With the second wave and associated lockdown/restrictions, economic disruption is now clearly visible,” the researchers wrote. “At least 20 States are now in lockdown… our business activity index which has been declining steeply since April, has dipped to a new low of 71.7”, a level attained in mid-August 2020, they added.

Mr. Ghosh also observed that the case load was not directly related to people’s movement, with cases having increased in Kerala, Bihar, Haryana and Uttarakhand even as mobility had declined in these States.

India’s hopes of a healthy rate of economic growth in 2021-22, after last year’s sharp contraction, also now appear hard to realise, according to the researchers. On April 23, SBI had cut its GDP growth forecast to 10.4%, from 11%. Two weeks later, it is a ‘little apprehensive’ of the economy posting even double-digit growth.

“We had earlier revised our FY22 real GDP estimate… At that time, only a few States (like Maharashtra and Delhi) had imposed lockdowns and most of the States adopted night curfew only,” the researchers noted. But the situation had altered completely, with 48 lakh new cases recorded since April 23, and the virus’s extensive spread forcing almost every State to impose total or partial lockdowns.

3. RBI sets up group to help review panel

The Reserve Bank on Friday said an advisory group had been constituted to assist the second Regulatory Review Authority (RRA) which was set up by the central bank earlier this month to streamline regulations and reduce the compliance burden of regulated entities.

Headed by SBI Managing Director S. Janakiraman, the group will assist the RRA by identifying regulations, guidelines, and returns that can be rationalised. The advisory group’s members include T. T. Srinivasaraghavan (former MD, Sundaram Finance).

Regulatory Review Authority, 2.0

The Reserve Bank of India (RBI) announced the setting up of a regulatory review authority, RRA 2.0, to review its regulations internally and in consultation with other stakeholders.

• Deputy Governor M Rajeshwar Rao has been appointed as the head of the RRA 2.0 which would be set up for a period of one year from May 1, 2021, unless its tenure is extended.
• The RRA 2.0 will focus on streamlining regulatory instructions and reducing the compliance burden of regulated entities by simplifying procedures and reducing reporting requirements, wherever possible.
• The authority has been christened as such because it follows a similar exercise conducted in 1999-2000.
• The central bank had set up an RRA initially for a period of one year from April 1, 1999, for reviewing the regulations, circulars, reporting systems, based on the feedback from the public, banks, and financial institutions.
• The recommendations of the RRA enabled streamlining and increasing the effectiveness of several procedures, simplifying regulatory prescriptions, paved the way for issuance of master circulars, and reduced reporting burden on regulated entities.

4. Editorial-1: The fig leaf of patent protection has to drop

The U.S.-supported patent waiver in the COVID fight has the potential to bring in much-needed global health equity

The decision of the President of the United States, Joe Biden, to support the India-South Africa proposal, seeking a waiver of patent protection for technologies needed to combat and contain COVID-19, comes as a shot in the arm for global health. The proposal that was placed before the World Trade Organisation (WTO) had been facing resistance from several high income countries including the U.S. administration. A change in the American position supporting a temporary waiver could act as a catalyst for building consensus in favour of that proposal when it comes up for fresh consideration at the WTO in June. However, the path ahead is not clear. While France and Russia have declared support, Germany has voiced its opposition.

Predictable responses

Response to the proposal was divided during earlier debates at the WTO. While many low and middle income countries supported it, resistance came from the U.S., the United Kingdom, the European Union, Switzerland, Australia and Japan. A strange addition to this group was Norway, which usually supports initiatives that promote global health equity. On this occasion, it chose to shield patent rights. Since the WTO operates on consensus rather than by voting, the proposal did not advance despite drawing support of over 60 countries.

Predictably, the pharmaceutical industry fiercely opposed it and vigorously lobbied many governments. Right-wing political groups in the high income countries sided with the industry. Microsoft co-founder and billionaire Bill Gates was strident in his opposition to patent waivers for vaccines, justifiably drawing ire from the public health community for a stance that was at great variance from his projected image as a messiah of global health. It appeared that patent rights would be doggedly defended even in the face of a devastating pandemic.

Hollow reasons

Many specious reasons were offered for such a defence. It was argued that the capacity for producing vaccines of assured quality and safety was limited to some laboratories and that it would be hazardous to permit manufacturers in low and middle income countries to play with technologies they cannot handle. This smacks of hypocrisy when pharmaceutical manufacturers have no reservations about contracting industries in those countries to manufacture their patent-protected vaccines for the global market. The low labour costs in those countries are obviously so attractive that confidence in the quality and the safety of their products is high, so long as patents and profits are protected.

This amazing duplicity has been seen for years when multinational firms have subcontracted manufacture of patented products to industries with low production costs in developing countries. This has been true of pharmaceutical products, as it has been of branded consumer products and luxury goods. This fig leaf has to drop, at least in a pandemic.

The counter to patent waiver is an offer to license manufacturers in developing countries, while retaining patent rights. This restricts the opportunity for production to a chosen few. The terms of those agreements are opaque and offer no assurance of equity in access to the products at affordable prices, either to the country of manufacture or to other developing countries.

It was also stated that developing countries could be supplied vaccines through the COVAX facility, set up by several international agencies and donors. While well intended, it has fallen far short of promised delivery. Some U.S. States have received more vaccines than the entire Africa has from COVAX. The trickle down theory does not work well in the global vaccine supply, just like its dubious application in economics.

Critics of a patent waiver say there is no evidence that extra capacity exists for producing vaccines outside of firms undertaking them now. Even before the change in the U.S.’s position, manufacturers from many countries expressed their readiness and avidly sought opportunities to produce the approved vaccines. They included industries in Canada and South Korea, suggesting that capable manufacturers in high income countries too are ready to avail of patent waivers but are not being allowed to enter a restricted circle. The World Health Organization’s mRNA vaccine technology transfer hub has already drawn interest from over 50 firms.

Instead of arguing that capacity is limited, should not high income countries and other donors be supporting the growth of more capacity to meet the current and likely future pandemics? They should learn from the manner in which India built up capacity and gained a reputation as a respected global pharmacy by moving from product patenting to process patenting between 1970 and 2005.

China line, safeguards

Patent waivers are also dismissed as useless on the grounds that the time taken for their utilisation by new firms will be too long to help combat the present pandemic. Who can set the end date for this pandemic, when many countries have low vaccination rates and variants are gleefully emerging from unprotected populations? If the world boasts of the speed with which previously little known companies produced vaccines in record time in 2020, why not support others to develop that capacity through technology transfer? Efficacy and safety of their products can be assessed by credible regulatory agencies and the World Health Organization. Patent waivers will benefit by increasing access not just to vaccines but also to essential drugs and diagnostics. Surely, that will not take much time.

An argument put forth by multinational pharmaceutical firms is that a breach in the patent barricade will allow China to steal their technologies, now and in the future. The original genomic sequence was openly shared by China, which gave these firms a head start in developing vaccines. Much of the foundational science that built the path for vaccine production came from public-funded universities and research institutes. Further, what use is it to hold on to patents when global health and the global economy are devastated? Who will buy their precious products then?

The perennial argument, offered for defending patent protection, is that innovation and investment by industry need to be financially rewarded to incentivise them to develop new products. Even if compulsory licences are issued bypassing patent restrictions, royalties are paid to the original innovators and patent holders. They will continue to gain revenue, though not super profits. Pfizer’s vaccine generated $3.5 billion in revenue in the first quarter of 2021, while mostly reaching the arms of the world’s rich. It expects $15 billion sales this year. Moderna says it expects sales of $18.4 billion in 2021. The incentive to protect profits is very strong indeed.

Building on Biden’s gesture

The World Trade Organization resolves debates by consensus and not by voting. The process may drag on, despite U.S. intervention. If Mr. Biden succeeds in driving consensus to provide a global thrust to combat a global threat, he will match Franklin D. Roosevelt’s leadership in the Second World War. He does not have such an alliance in place now.

So, developing countries must take heart from his gesture and start issuing compulsory licences. The Doha declaration on TRIPS flexibilities permits their use in a public health emergency. National governments must be trusted to promote credible companies and not permit fly-by-night operators. High-income countries and multilateral agencies should provide financial and technical support to enable expansion of global production capacity. That will reflect both ennobling altruism and enlightened self-interest.