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Free vaccines from Centre’s quota and free to strike deals: Why states have no reason to complain

The focus should now move to making the most of this flexibility to vaccinate as many as possible. Politicking can wait until the storm settles down 

April 22, 2021 / 03:02 PM IST

As of 8 am, April 21, India had administered 130 million COVID-19 vaccine doses. This could go up substantially from May 1 when everyone above 18 years will be eligible to take the jab. India’s ability to flatten the curve and contain the deadly virus’ spread will depend on how quickly the country is able to carry out the world’s biggest mass vaccination exercise in record time.

This will, among other things, depend on keeping vaccine supplies of hundreds of millions of doses flowing uninterruptedly for months.

India’s first goal should be to vaccinate about 700 million people with two doses, which would include all above the 18 years. The task, for vaccine producers and the government, is to secure continuous supplies of 1.4 billion doses over a 12-month period.

One of the main criticisms against the Narendra Modi government’s vaccination strategy was that too much power was concentrated on the Centre. The states are at the forefront of this war and, therefore, should be empowered to decide on vaccine procurement based on need.

The Centre, it was argued, had needlessly erected an extra layer of bureaucracy by centralising vaccine supplies. By not allowing state governments and the private sector to directly ink supply agreements with vaccine makers, India may have lost crucial time in containing COVID-19’s spread that has surged like a tsunami in the second wave.


There was also mounting condemnation of the Centre’s decision of not making the vaccines universally accessible and placing an age threshold of 45 years or above as an eligibility criteria to take the shot.

Easing Controls

The Centre’s April 19 decisions broadly mirror this line of thought. The ‘Liberalised and Accelerated Phase 3 Strategy of Covid-19 Vaccination from May 1’ makes anyone above 18 years eligible for taking the Covid-19 vaccine.

State governments have been allowed to directly procure from vaccine makers, both from India and overseas. The private sector, including hospital chains, would also be able to place similar orders and carry out vaccination exercises.

Indian vaccine makers will have to set aside half of their produce for the Centre’s procurement, which will then be distributed to states based on need on the criteria of extent of infection (number of active COVID-19 cases) and performance (speed of administration).

The vaccine makers can get into direct procurement agreements with state governments and the private sector for supplying the remaining half of their produce at a price that will be transparently announced in advance.

On April 21, the Pune-based Serum Institute of India (SII), the world’s largest vaccine maker, said it will charge state governments Rs 400 and private hospitals Rs 600 per dose of its Covishield COVID-19 vaccine.

Importantly, the SII will charge both the Centre and States at a uniform Rs 400 per dose of Covishield from May 1, raising it by Rs 250 per dose for the Centre, which until now, was procuring it at Rs 150 per dose.

Bharat Biotech, which produces Covaxin, has not yet announced its pricing for state governments and the open market.

No Reason To Complain

Besides, states will continue to have recourse to free vaccine supplies that the Centre will continue to give even after May 1 from the 50 percent of all production that domestic vaccine makers will sell to the Centre.

The direct procurement deals with vaccine manufacturers gives the state governments the extra headroom to amply create a ready pipeline to ensure a continual vaccination process. This is precisely what the states have been demanding over the last few weeks. They wanted to be adequately empowered to keep the supply lines running and prevent a situation, which is currently seen in many places, to turn away people from hospitals and centres because supplies have dried up.

The government’s decision to open up the vaccination process, allowing state governments and the private sector to buy directly from manufacturers, is aimed at decentralising vaccine supplies. Until this, states were dependent on the Centre and districts were reliant on the state capitals for vaccine supplies.

Vaccine stocks need to be replenished on an emergency scale, and let those fighting it out at the battlefront — the states — decide on how much, when and how they ensure these deliveries. This is what the Centre has sought to do by easing the process.

There could be merit in the argument that this may have come a few weeks earlier. That said, states must not have too many reasons to complain about restrictions on decision making on vaccine supplies. They can now directly procure from the domestic market at a price identical to what the Centre pays.

They will not need to come knocking on the Centre’s door seeking to secure such supplies, as also dip into free vaccines from the Centre’s quota. The focus should now quickly move to making the most of this flexibility to vaccinate as many as possible. Politicking can wait until the storm settles down a bit.
Gaurav Choudhury is consulting editor, Moneycontrol.

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