Free Covid vaccine, foodgrains to cost Centre up to ₹1.45 lakh crore

NEW DELHI: The government will spend up to ₹1.45 lakh crore additional money to provide free vaccines and foodgrains to people devastated by the deadly second wave of Covid-19 infections, officials aware of the developments said on Tuesday.

Prime Minister Narendra Modi’s announcement of providing free inoculation to all adults will entail total spending of anywhere between ₹45,000 crore and ₹50,000 crore. This is higher than ₹35,000 crore that the government had budgeted.

Extending 5 kg of wheat or rice and 1 kg of pulses every month to nearly 800 million beneficiaries till November will cost between ₹1.1 lakh crore to ₹1.3 lakh crore.

Taken together, the additional spending could be up to ₹1.45 lakh crore, the officials said.

Reversing a policy where states competed for vaccine supplies for certain age categories, Modi on Monday announced that the central government will procure vaccines for all adults. All above 18 years of age will get

free vaccines from June 21.

Also, the free foodgrain scheme that was to end in June has been extended till November.

The officials indicated that the government may have got enough buffer from the largerthan-expected ₹99,122 crore dividend from the Reserve Bank of India (RBI) and the windfall from record taxes on petrol and diesel.

The two together may just be enough to fund the free vaccines and the food grain cost.

The officials, however, did not say how and from where the vaccines will be procured.

India currently uses the AstraZeneca vaccine produced by the Serum Institute of India, and another developed at home by Bharat Biotech. Russia’s Sputnik V will be commercially launched in the country by the middle of this month.

The government is also talking to other foreign vaccine makers to buy additional shots.

Modi also announced that free food grain will be given to 800 million vulnerable and poor people till November to help them tide over the difficulties on account of the second wave of the pandemic.

The PM Garib Kalyan Ann Yojana (PMGKAY) was introduced last year during the first wave of the pandemic between April-November 2020. This will continue in the May to November 2021 period.

For the current fiscal, the food subsidy is estimated at over ₹2.42 lakh crore.

The food subsidy rose sharply to over ₹4.22 lakh crore in the RE (revised estimates) of 2020-21 from over ₹1.15 lakh crore in the BE (budget estimates).

The government’s decision to provide free ration to citizens during Covid-19-related lockdown and provisioning for the pre-payment of National Social Security Fund (NSSF) loans with Food Corporation of India (FCI) of about ₹1.5 lakh crore were the major reason for the rise in food subsidy.

The Centre provided an additional quota of foodgrains free of cost during the April-November 2020 period of last fiscal to over 800 million beneficiaries. Free rations were also given to migrant labourers.