Prime Minister Narendra Modi’s decision to reverse the vaccination policy to the original model also makes good economic sense as it would save state governments’ funds to the tune of nearly Rs 30,000 crore, almost equivalent to the union budget of Rs 35,000 crore for the vaccination exercise.
States, from May 1, got the job to vaccinate nearly 54 crore Indians in the age-group of 18 to 44 years, for which they started procuring vaccines from the two manufacturers. Serum Institute was selling each dose to states for Rs 300 while Bharat Biotech was selling a dose for Rs 400 to states.
The states had assumed that nearly 40 crore people of the 18-44 age group would turn up at government facilities for free vaccines, and the rest could go to private hospitals and pay for the jabs. Assuming an average cost of Rs 700 to be incurred by the states for two jabs to each person, the cost was working out to nearly Rs 30,000 crore, including operational costs.
At a time when states are facing an economic crunch due to lockdowns since April, the additional cost of vaccines was a big burden, multiple state government functionaries told News18. Like Rajasthan was looking at allocating a budget of Rs 3500 crore, Bihar was looking at a budget of over Rs 4000 crore, Kerala was estimating a cost of Rs 1300 crore while Punjab planned to allocate Rs 1000 crore for buying the jabs.
The cost was expected to go up if global vaccine tenders of many states saw results as foreign vaccines would cost even more. “Corners had been cut to create these funds at the cost of other development initiatives in the state. The state can now go back to using this money for public welfare initiatives and helping people to emerge out of the lockdowns and get on with their livelihoods,” a senior Rajasthan functionary said.
States have however already paid for doses expected in June and for 33 lakh doses administered so far to the 18-44 group.
Centre’s Cost May be lesser
It is expected that the Centre will continue to buy doses from the two manufacturers at Rs 157 per dose as earlier but the quota for the same will now increase from 50% of the their total production to 75%. Given this price is almost half at which the manufacturers supplied the vaccines to the states (Rs 300 and Rs 400 per dose by Serum and BBI respectively), the exercise for vaccinating the 18-44 group should not work out at more than Rs 15,000 crore for the central government.
“The manufacturers can still sell 25% of their stocks to the private hospitals at the higher price fixed by them. We will buy all 75% vaccines at the same price,” a central government said. However, a word is still awaited from the two manufacturers if they would sell 25% of their stock earlier enmarked for the states to the Centre at the same price at which they have been supplying 50% of their stock so far.