Chief Economic Advisor K V Subramanian on Thursday said the country may need an additional spending of Rs 15,000 crore for the rollout of Centre’s new vaccine policy over the budgetary allocation of Rs 35,000 crore. From June 21, the government’s free drive will cover all adults across states, thus making it necessary for the Centre to buy more doses — 75 per cent of what is made in India — for its campaign.
Under the existing vaccination policy that took effect on May 1, the Centre bought 50 per cent of vaccines produced in India. Vaccine-makers could sell 50 per cent of what they produced directly to states (25 per cent) and private players (25 per cent). However, now apart from its 50 per cent, the Centre will also procure the 25 per cent from the state quota and distribute the doses to states based on certain parameters as part of the new policy.
So far, the government has spent about Rs 6000 crore on the inoculation programme across the country. Finance Minister Nirmala Sitharaman has expressed readiness to increase budgetary allocation it, he told CNBC-TV18, adding that the budget was a fiscally expansionary one.
₹15,000 cr addl spending may be neded for vaccination over the ₹35,000 cr budget allocation,’ says CEA @SubramanianKri. Adds ₹40 lk jabs/day being done in a single 8-hour shift, we can easily double this to over 80 lk doses/day if we increase shift timings’. @ShereenBhan. pic.twitter.com/24uxs4kpud— CNBC-TV18 (@CNBCTV18News) June 17, 2021
Earlier this month, Sitharaman pitched for front-loading of capital expenditure, saying it is critical for revitalisting the economy post the coronavirus pandemic. At 34 per cent of GDP, the gross fixed capital formation in Q4 was highest in 24 quarters, Subramanian said. The fiscal deficit for 2021-22 was budgeted at 6.5 per cent.
On June 7, Prime Minister Narendra Modi announced that the Pradhan Mantri Garib Kalyan Anna Yojana will be extended till Diwali. The expansion done under the scheme amounts to Rs 70,000 crore since vaccination was expanded to overall population, Subramanian said.
Speaking on how a higher target of per day vaccination can be achieved, Subramanian said, “The peak that we have hit in inoculation is about 42 lakh per day and that we have done in a shift of 8-9 hours. The months of August and September are projected as when there will be a significant ramp up in supply. We can easily touch 80-84 lakh inoculations a day with 24×7 shifts for a couple of months. There are ways to operationalise the target of more than 70 lakh shots a day. An ambitious target of 1 crore shots a day can also be achieved by increasing the time of inoculation per day."
On vaccination being one of the key drivers to aid the recovery, he said “We have to track impact of measures announced in the budget. The budget had incorporated lot of steps needed to enable recovery from pandemic."
An assessment by the Reserve Bank of India (RBI) has said that the impact of the second wave impact is not likely to be as large as the first wave. We are undertaking study on sectoral impact. There has been a V-shape recovery in macro-economic indicators, he said.
Further, the Chief Economic Advisor said India is now among most competitive countries in terms of corporate tax rate. The G7 nations are now reflecting on what India had decided earlier on corporate tax rate, he said.
“We talked about need for innovation in our economic survey this year. There is no reason why Indian IT sector cannot create products that the world can use. In balance between fiscal and growth, growth delivers debt sustainability," he said.