As PM Modi centralizes vaccine procurement, FinMin to seek Parliamentary approval for more funds

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Central government has spent around Rs 5,000 crore of the Rs 35,000 crore vaccination budget for 2021-22 so far, and will seek Parliamentary approval for further funds only after exhausting most of that budget, Moneycontrol has learnt.

The budgeted vaccination expenditure and any amount further sought through Supplementary Demand for Grants in the upcoming sessions of Parliament should be enough to fund the Centre’s expanded vaccination programme, a senior government official said.

On June 7, Prime Minister Narendra Modi, in an address to the nation, said that the central government will make centralised vaccine procurement for 75 percent of vaccine capacities and ensure vaccine supplies to all states, thus bringing the vaccination for 18-44 age group under the centre’s ambit as well.

Private vaccination centres will be allowed to procure vaccine from the remaining 25 percent. The new vaccination policy rules come in effect from June 21. This means that from that day, the centre will distribute doses to the states for the 18-44 age group, instead of the states procuring them directly from vaccine makers.

The PM’s announcement comes in the backdrop of the criticism from many quarters on what some see as states being left on their own devices to procure vaccines, and the Supreme Court had said that the decision to allow states and union territories to procure for the 18-44 group was ‘irrational and arbitrary’.

Now that the vaccine procurement policy has again been centralized, the Rs 35,000 crore vaccination budget will be used up much earlier than was expected previously.

Chief Economic Advisor Krishnamurthy Subramanian had said last week that around 20 per cent of the 45 plus age group has been vaccinated with at least one dose.

PM’s announcement welcomed

It is understood that the centre’s earlier plan was to fully inoculate the 45 plus age group and then move to the 18-44 age group. The centre had decided to open up the latter category to states after some of them asked to do so, the person quoted above said.

“The existing budget will be used and then only Parliamentary approvals will be sought for new funds,” the official said, and added that it was difficult to predict what that additional amount will be just now.

Over the coming weeks, the Finance Ministry is expected to have a clearer picture on how much extra could be spent.

The around Rs 5,000 crore spent so far includes the Rs 4,500 crore ‘advance’ given to Bharat Biotech and Serum Institute of India for supplying vaccines to the centre till July.

Industry bodies and experts welcome the Prime Minister’s announcement on vaccines.

“The announcements today are welcome moves in the critical task of ensuring quick rollout of vaccines. Centralisation of procurement will ensure uniformity of procurement prices and create bandwidth among states to manage inoculation of their adult populations,” said TV Narendran, President of Confederation of Indian Industries.

“This would also ensure an equitable allocation of vaccines in states and was a key ask of CII too. Making the vaccines available for all the eligible population free of cost will go a long way in protecting the citizens and resuming normal economic activities at the earliest,” he said.

“Prime Minister’s address to the nation has provided a clear direction to India's vaccination programme with an avowed objective of providing free jabs to all adults, while providing a window for those willing to pay through private sector hospitals. The revised policy would remove all procedural bottlenecks for availability of vaccines to the states," ASSOCHAM Secretary General Deepak Sood said.