Govt gives ‘advance’ of around Rs 4,500 crore to Serum Institute of India, Bharat Biotech

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The central government, on April 19, approved an advance of around Rs 3,000 crore to Serum Institute of India, and around Rs 1,500 crore to Bharat Biotech, Moneycontrol has learnt from a top government official.

The amount was an advance for the supply of Covishield and Covaxin by the respective companies over the next 2-3 months, the official confirmed. There were reports earlier that the amounts had been given as a grant.

“The government is not in the practice of giving grants to profit companies. There was a proposal that they should be given an advance payment for vaccines that they will be supplying over the next 2-3 months,” the official said. In doing so, the centre has relaxed its own general financial rules.

Under the General Financial Rules of the central government, specifically rule 172, such huge advances are not given to contractors or for-profit companies without the latter furnishing a bank guarantee or collateral.

“The Finance Ministry today has relaxed the general financial rules and permitted the Ministry of Health to pay, if they so wish, to make advance payment to vaccine suppliers, without the bank guarantee. I believe the Health Ministry is already doing so,” the official said.

The person added that this was done keeping in mind the need for vaccines from across the country.

This move comes days after the centre announced financial support to three state-owned owned biopharmaceutical institutions to bulk up the production of Covaxin, and that it will provide Rs 65 crore to the only manufacturer of the vaccine currently, Hyderabad-based Bharat Biotech International.

The manufacturer of Covishield, Pune-based Serum Institute, which is the world’s largest vaccine maker, had sought a financial aid of Rs 3,000 crore two weeks ago to ramp up production.