The Finance Ministry, on Monday, stated that the provisioning of Rs.35,000 crore for vaccination expenditure under the title ‘Transfers to States’ in the Union Budget 2021-22 does not curb the centre from utilising the funds to buy COVID-19 shots. The Finance Ministry stated that it is incorrect to tell that the Central Government has made no provision for expenditure on COVID-19 vaccination.
The Finance Ministry refuted reports that the Central Government had made no provision for COVID-19 vaccination expenditure. An amount of Rs.35,000 crore is shown under the ‘Demand for Grants No.40’, titled ‘Transfer to States’. The Central Government has been procuring and paying for COVID-19 vaccines through the ‘Transfers to State’ head of account.
The utilisation of the amount under the ‘Demand for Grants’ has many administrative advantages. As the expenditure for the vaccines is a one-off expenditure outside the standard Centrally Sponsored Schemes of the Health Ministry, separate funding helps for easy management and monitoring of these funds.
The ‘Demand for Grants’ is exempt from the quarterly expenditure control restrictions, which apply to other demands, thus ensuring there is no hindrance in the vaccination programme. The Ministry of Health operates the amount given for vaccination under the head ‘Transfer to States’. The Central Government passes the vaccines to the states as grants in kind. The states carry out the actual administration of these vaccines.
The Finance Ministry also stated that using the ‘Demand for Grants’ titled ‘Transfer to States’ in no way indicates that the Central Government cannot incur expenditure directly under this head. Currently, the centre provides free of cost COVID-19 vaccines for people above 45 years of age and all frontline workers.
The Central Government has given more than 17.56 crore vaccines free of cost to the states/UTs. It has placed an order for eight crore doses for Rs.1,104.78 crore with Bharat Biotech for Covaxin and 26.60 crore doses for Rs.3,639.67 crore with the Serum Institute of India for Covishield vaccine.
India is currently facing the worst outbreak of COVID-19 cases as there is a rapid increase in the COVID-19 cases daily. Many people have lost their family members and friends due to the pandemic. There is a need for vaccines, oxygen, and proper administration of allotment of beds at such a time.
The Finance Ministry’s statement clarifies spending and utilising the money for COVID-19 vaccines by the Central Government. The centre can utilise the funds of Rs.35,000 crore under the title ‘Transfers to States’ in the Union Budget 2021 for vaccination expenditure and buy the COVID-19 vaccines from these funds. The centre can transfer these COVID-19 vaccines to the states, thereby providing help to the states to obtain and administer vaccines to the people.
For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in
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