Free vaccine, food grains to cost government up to Rs 1.45 lakh crore

The government will spend up to Rs 1.45 lakh crore additional money to provide free vaccines and foodgrains to people devastated by the deadly second wave of Covid infections, sources said on Tuesday.

Prime Minister Narendra Modi’s announcement of providing free inoculation to all adults will entail total spending of anywhere between Rs 45,000 crore and Rs 50,000 crore. This is higher than Rs 35,000 crore that the government had budgeted.

Extending 5 kg of wheat or rice and 1 kg of pulses every month to nearly 80 crore beneficiaries till November will cost between Rs 1.1 lakh crore to Rs 1.3 lakh crore.

Taken together, the additional spending could be up to Rs 1.45 lakh crore, the sources said.

Reversing a policy where states competed for vaccine supplies for certain age categories, Modi on Monday announced that the central government will procure vaccines for all adults. All above 18 years of age will get free vaccines from June 21.

Also, the free foodgrain scheme that was to end in June has been extended till November.

The sources indicated that the government may have got enough buffer from the larger-than-expected Rs 99,122 crore dividend from the Reserve Bank of India (RBI) and the windfall from record taxes on petrol and diesel.

The two together may just be enough to fund the free vaccines and the food grain cost.

The sources, however, did not say how and from where the vaccines will be procured.

India currently uses the AstraZeneca vaccine produced by the Serum Institute of India, and another developed at home by Bharat Biotech. Russia’s Sputnik V will be commercially launched in the country by the middle of this month.

The government is also talking to other foreign vaccine makers to buy additional shots.

India has so far administered over 23 crore doses of vaccines in the world’s biggest inoculation programme, which began on January 16.

India’s daily Covid-19 cases have dropped below 1 lakh for the first time in two months. The health ministry reported 86,498 new infections in the last 24 hours, down from 4,14,188 cases reported at the peak of the second wave on May 7.

Covid-related death rose by 2,123 to 351,309.

Modi also announced that free food grain will be given to 80 crore vulnerable and poor people till November to help them tide over the difficulties on account of the second wave of the pandemic.

The PM Garib Kalyan Ann Yojana (PMGKAY) was introduced last year during the first wave of the pandemic between April-November 2020. This will continue in the May to November 2021 period.

For the current fiscal, the food subsidy is estimated at over Rs 2.42 lakh crore.

The food subsidy rose sharply to over Rs 4.22 lakh crore in the RE (revised estimates) of 2020-21 from over Rs 1.15 lakh crore in the BE (budget estimates).

The government’s decision to provide free ration to citizens during COVID-19-related lockdown and provisioning for the pre-payment of NSSF loans with FCI of about Rs 1.5 lakh crore were the major reason for the rise in food subsidy.

The Centre provided an additional quota of foodgrains free of cost during the April-November 2020 period of last fiscal to over 80 crore beneficiaries. Free rations were also given to migrant labourers.