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Rs 35,000-cr Covid vaccine allocation in Budget can cover 50 cr Indians — Expenditure Secy

T.V. Somanathan, expenditure secretary in finance ministry, says there's nothing hidden in Budget; it accounts for all spending by govt departments in 2021-22.

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New Delhi: The Rs 35,000-crore allocation made in Budget 2021 for the Covid-19 vaccination programme will cover the full cost of vaccinating 50 crore Indians, T.V. Somanathan, expenditure secretary in the finance ministry, has said.

In an interview to ThePrint a day after Finance Minister Nirmala Sitharaman presented the Union Budget for 2021-22, Somanathan said the government will provide more funds for the immunisation exercise later in the year, if required. Details for later stages of the vaccination programme, he added, are yet to be worked out.

“What is being provided for will cover the full cost of vaccinating, including the logistics costs, 50 crore people,” he said, adding that a rough estimate of Rs 700 has been factored in per person for two doses. The exact costing and pricing are yet to be worked on, he added. 

Both the vaccines that are currently being administered under India’s vaccination programme — Covishield and Covaxin — follow a two-dose schedule. 

The Modi government has identified four priority groups for Covid vaccination — health workers, frontline workers like police and defence personnel, those aged over 50, and those who are younger but have comorbidities. These four groups, according to government estimates, total around 30 crore people.

The first phase of the Covid-19 vaccination programme began last month with health workers being the first to receive the vaccine. The vaccination of other frontline workers began in February. 

The Union Ministry of Health and Family Welfare and the Niti Aayog have yet to take a call on whether the Covid-19 vaccine will be free for everyone, and if states will be asked to contribute a part of the cost.

Also Read: Why this is Modi govt’s first ‘BJP Budget’, marks shift in the Right direction, punts on growth

‘Nothing hidden in Budget’

With this Budget, Somanathan said, the government has taken a concrete step towards fiscal transparency.

“The finance ministry has accounted for all expenditures by government departments in Budget 2021-22 itself, and there is nothing hidden,” he said.

The government announced in the Budget that it will discontinue the practice of the Food Corporation of India (FCI) borrowing from the National Small Savings Fund to fund the food subsidy — seen as a tactic to hide the true extent of the fiscal deficit. 

Instead, the government has made an allocation for a sharp increase in the food subsidy for 2020-21 and 2021-22 in the Budget itself. This has raised the food subsidy to Rs 4.22 lakh crore in 2020-21 (partly on account of the free foodgrains given to the poor as part of the ‘Atmanirbhar’ package for lockdown relief), from the Rs 1.15 lakh crore budgeted for. 

The food subsidy for 2021-22 has been budgeted at Rs 2.42 lakh crore.

The total borrowings from the National Small Savings Fund by government departments and ministries has come down to Rs 30,000 crore in 2021-22 from Rs 1.29 lakh crore in 2020-21. 

Explaining how borrowings by the FCI are different from those by other state-owned firms, Somanathan said agencies like Nabard and the National Highway Authority of India can repay their own borrowings. The latter, he pointed out, can’t really be classified as off-budget borrowings.

“They are autonomous agencies that have their own revenue sources. They are not comparable to a general government department,” he added. 

“What has been eliminated is the use of extra-budgetary resources as a substitute for resources of the government itself,” he said. “The projection for extra-budgetary resources for next year is Rs 30,000 crore, and that too, we have kept it just in case we have a rainy day.”

With the changes made in the way the government shows its fiscal deficit, as well as the massive expenditure on account of the pandemic, the government’s fiscal deficit for 2020-21 shot up to 9.5 per cent of gross domestic product. For 2021-22, it has been estimated at 6.8 per cent.

Also Read: Budget 2021 is taxpayer friendly — plugs abuse of welfare schemes, respects honest taxpayers


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