You are a District Magistrate of an area which has seen a huge surge in COVID-19 cases during the second wave of pandemic in India. The health infrastructure is already overburdened. Hospitals are overwhelmed, crematoriums and burial sites are regularly running out of space, and covid testing is struggling to meet the demand. Also, the vaccination drive is at the risk of going off-track due to the demand-supply mismatch. During this difficult time, you come to know that there are some people who are engaging in black marketing, hoarding and profiteering by using every trick in the book to cheat, ransom and swindle Covid-19 patients and their kin in the name of scarcity of drugs, oxygen and hospital beds. Black marketing, hoarding and profiteering are a classic case of market failure, which highlights the significance of state intervention in a crisis situation. How can state effectively play the role of a regulator as well as service provider in such cases of market failure?

1. Black marketing, hoarding and profiteering in the midst of a crisis points to the brutal and insensitive character of the market which is driven only by profit agenda.

2. Wherein the demand was high, supply should have also increased proportionately going by the theory of economics; the monopolistic presence as well as cartelisation of few players in the market distort the market into their favour.

State as a regulator

1. State can take action against such violators of law by applying provisions of Essential Commodities Act, 1955. Epidemic Diseases Act, 1897 as well as Disaster Management Act, 2005 also give power to government to act sternly against perpetrators.

2. In the face of deadly pandemic, government can regulate the sale of essential medical supplies by close monitoring of such supplies from industry gate to consumers.

3. 24x7 online complaint registration portal should be opened so that anyone who faces such incident can instantly report it.

4. Govt can also fix the price of essential medical supplies for equitable distribution.

State as a Service provider

1. Since majority of the hospitals giving care to covid-19 patients during the pandemic are government run; government can easily provide the needy the medical supplies in an efficient manner.

2. Logistics support can be provided by state to divert supplies from surplus areas to deficient areas. For example, use of railways during the pandemic for essential supplies were noticed.

3. Production of essential supplies by state run companies. For example, oxygen production in steel manufacturing facilities.

4. State can also collaborate with civil society groups and NGOs for addressing issues at the grassroots level on priority issues.