~35,000 CR FUND ENOUGH TO VACCINATE 1 BN: GOVT

Only ~5,000 crore spent from budgetary allocation so far

Even as Prime Minister Narendra Modi announced free supply of Covid-19 vaccines to states for all adults, government officials indicated that the Centre’s budgetary allocation of ~35,000 crore for the inoculation drive would be adequate. This amount would enable the government to vaccinate about a billion people, assuming that a jab costs ~150, a senior finance ministry official said.

Even as Prime Minister Narendra Modi has announced free supply of Covid-19 vaccines to states for all adults, government officials indicated that the Centre’s budgetary allocation of ~35,000 crore for the inoculation drive would be adequate. This amount would enable the government to vaccinate about a billion people, assuming that a jab costs ~150, a senior finance ministry official said.

While the Centre procures vaccines at ~150 per dose, state governments and private hospitals have been getting it at a much higher price. On Monday, the PM said that the Centre would return to the centralised system of procuring vaccines for all states.

The government has so far spent about ~5,000 crore on vaccines in the current financial year (since April), according to estimates. This includes the advance payment made to vaccine makers.

“The budgetary allocation was made after factoring in various internal assessments. We had arrived at the budget keeping in mind the procurement cost and other elements. But the government is committed to provide any additional funds in case it is required, the official said.

Economists believe the change in policy may overshoot the budgetary level. “The proposal will shift the expenditure to the central government from the state governments, and is likely to result in an overshoot above the budgeted level,’’ said Aditi Nayar, cheif economist, ICRA. But she said it would depend on the procurement cost.

In an interaction with Business Standard last week, Finance Minister Nirmala Sitharaman had spoken about the vaccine allocation. “If there’s a need, I’m willing to give more. The government’s systems will give it to vaccine makers so long as they’re able to give an utilisation certificate.’’ The FM had added, ‘’I’m saying I'll give it to the vaccine manufacturers without guarantees, take the payment in advance and give me the supplies. The moment you give me one lot of supply, I'll give you more. I'm conscious of the urgency of the situation. It will go on as we negotiate with more suppliers coming in.”

The Union Budget for FY22 had earmarked ~35,000 crore for procuring vaccines and related logistics.

Health sector comes under the state list and, thus, the provision of financing public health expenditure is primarily the responsibility of state governments. However, the Centre also implements a number of centrally sponsored programmes such as the National Health Mission (Urban and Rural), National Mission on Ayush and the Ayushman Bharat scheme.

Sources in the know say that the govt has so far spent about 5,000 crore on vaccines in the current financial year (since April). This is including the advance payment paid to vaccine manufacturers