Moneycontrol PRO
UPCOMING EVENT:Special webinar on Highlights of global investing in 2021 and what lies ahead' at 2 pm on 21st January, 2022. Register Now!
you are here: HomeNewsPolitics

Rahul Gandhi’s objection to private hospitals charging for COVID-19 vaccines is misplaced

While addressing the health crisis, the Centre will also have to protect the economy and take necessary steps to safeguard it. There is nothing wrong in earmarking 25 percent to private hospitals as long as 75 percent of the vaccines are given free of cost to the public 

June 08, 2021 / 05:08 PM IST
Senior Congress leader Rahul Gandhi (file image)

Senior Congress leader Rahul Gandhi (file image)

In his June 7 address to the nation Prime Minister Narendra Modi announced that the India would revert to its initial vaccination policy where the Centre would purchase and distribute vaccines to all states. He also said that of the total vaccines produced, 25 percent would be routed to the population via private hospitals which could charge a maximum of Rs 150 as service charge. The remaining 75 percent – to be procured by the centre - will be free of cost to all citizens.

Modi’s announcement has been welcomed by many from the medical fraternity, the public, etc. but the Congress, especially its leader Rahul Gandhi, have raised objections to the announcement. Gandhi, through a tweet, asked that if vaccines were free for all, why private hospitals should charge for it.

It is unfortunate that the grand old party and its leader is unable to appreciate how balanced an announcement has been made — and it appears that an objection has been raised for the sake of it.

The Centre’s revised COVID-19 vaccine policy, which kicks in from June 21, is a fine balancing act, the one that leaves something on the table for hospitals in the private sector, and indeed, for vaccine manufacturers. It must not be forgotten that private hospitals played a key role in treating COVID-19 patients and inoculating citizens, and that their participation has reduced considerable load on government facilities. Yes, there have been cases where some private hospitals have tried fleecing patients, and the government has taken action against many.

Gandhi’s question as to why should private hospitals charge when the vaccines are free has an innocence to it. He forgets that those vaccines that will be administered by private hospitals are bought by the hospital managements from the suppliers/manufactures and a service charge of maximum Rs 150 is par for the course as they will go to meeting a part of the costs these hospitals incur. In other words, the central government has decided to treat all adults as equals but the Congress leader is not mollified.


Bharatiya Janata Party (BJP) leader and Assam Chief Minister Himanta Biswa Sarma replied Gandhi, asking him not to ‘knit-pick like an immature kid’.

Private hospitals are not funded by taxpayers’ money. So expectations from them should be tempered by reality and reasonableness. They are also buying the vaccines at a much higher price vis-à-vis the central government which till recently was the monopsonist — the single buyer a la BSNL for telecom equipment during its monopoly days and the Indian Railways for rail and other paraphernalia.

Spare a thought for the Serum Institute of India (SII), the manufacturers of Covishield under license from AstraZeneca, and Bharat Biotech which manufacturers Covaxin. The latter especially is constrained to charge a higher price given its low volumes vis-à-vis the SII. If you grudge a manufacturer its profits, its interest in giving the state-of-the-art to the people will diminish.

So it is all a virtuous cycle — scientist have to be incentivised to invent; manufacturers too must be incentivised to convert their inventions into successful commercial products. The ultimate service-provider hospitals too must be incentivised. Government hospitals can afford to indulge in self-abnegation because they are funded with taxpayers’ money.

Of course, it is ideal for the central government to foot the entire bill — procurement, logistics and administering the jabs. But unfortunately India is not placed in such an ideal situation. It is fighting a shortage engendered partially by stockpiling by rich nations with deeper pockets and partially due to shortage of key raw materials and consumables such as nano filters, tubes and others running into some 200 items.

Thus, India finds itself in not an ideal situation — the raging pandemic could rear its head a third time, and there is a shortage of vaccines. While addressing the health crisis the Centre, as would any responsible government do, will also have to protect the economy and take necessary steps to safeguard it. Earmarking 25 percent of the vaccines to go via private hospitals is a well-heeded move, and one which let the manufacturers in turn subsidise the central government procurement. There is nothing wrong in dual pricing especially when three-fourth of the vaccines will reach the aam aadmi. Those who go to the private hospitals will be the affluent who do not mind paying for their vaccines. With this policy, the centre and government hospitals can also focus on low income and rural groups, which some say have been left behind in the vaccination drive.

Rahul Gandhi must appreciate the prudent economics behind this decision. His heart should not bleed for the affluent who cheerfully take their jabs for a price in their strides.

S Murlidharan is a chartered accountant and columnist. Views are personal.

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark