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New plan to push vax budget to ₹50,000 cr

Shishir Sinha New Delhi | Updated on June 09, 2021

With free foodgrain supply till Diwali, FinMin looking at enhanced outgo of ₹1.45-lakh cr

Reverting to the centralised vaccination procurement policy will see the government expenditure on jabs go up to ₹45,000-50,000 crore, according to Finance Ministry estimates. The Finance Ministry estimates also show that free additional foodgrains for 80 crore people till Diwali will cost ₹1-3 lakh crore. Along with vaccines, the total additional outgo is likely to go up to ₹1.45-lakh crore.

The two announcements were made by the Prime Minister Narendra Modi on Monday in an address to the nation.

According to sources, Finance Secretary TV Somanathan and Health Secretary Rajesh Bhushan met on Tuesday to discuss the financing of the new centralised vaccine policy. It may be recalled that Finance Minister Nirmala Sitharaman had provided ₹35,000 crore for vaccines in the Budget for 2021-22, and promised to come up with more funds,if needed.

Supply mix

“Much (the increase in expenditure) will depend on the mix of supply,” a senior Finance Ministry official told BusinessLine. As on date, the government has placed orders with Serum Institute of India and Bharat Biotech. Domestic production of Sputnik is expected to start soon, while the government has reserved 30-crore doses of the Biological-E vaccine that is undergoing Phase-3 clinical trials.

As regards the pricing of the Biological-E vaccine, the official said, “Expectations are the prices will be lower. If there is more supply from this source, then the total expenditure will come down.” The official, however, did not offer any price range for this vaccine.

Initially, the government had negotiated with SII and Bharat Biotech for supply at ₹150 per dose for Central procurement. It was estimated that at ₹150 a jab, the Budget allocation of ₹35,000 crore would help inoculate 100 crore people.

Changed rice equation

Hitherto, the Centre was getting 50 per cent of the total vaccine production at ₹150 a dose, while the price for the 25 per cent each for States and private hospitals varied.

Now, with the Centre set to pick up 75 per cent of the production, the price is expected to go up. The official did not disclose the price for the fresh order of 44 crore doses placed with SII and Bharat Biotech. Simultaneously, efforts are on to get Pfizer and Moderna vaccines, too. But, according to the official, these manufacturers do not fit into India’s public healthcare system.

For Pfizer a very different logistic set up is needed as its vaccine needs to be stored at -20 degree Celsius. “Can you expect the Public Health System to support that? the official said. While the US has agreed to supply the Moderna vaccine, it will be possible only in December and that too for a day’s requirement.

“These two supplies may not play a role in the government vaccination programme and thus will not have an impact on the overall expenditure,” he said as prices of these two vaccines are reportedly high.

Published on June 08, 2021

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