Centre can use Rs 35,000 crore 'Transfers to States' funds for Covid vaccines: Finance Ministry

The finance ministry on Monday said provisioning Rs 35,000 crore-expenditure for vaccines in the Union Budget for FY22 under the title 'Transfers to States' does in no way inhibit the central government from using the funds to buy Covid-19 shots.

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The amount of Rs 35,000 crore provided in the Union Budget for fiscal year starting April 1, 2021 (FY22) under the Demand for Grants No. 40, titled 'Transfers to States' has been done for several administrative advantages, including expenditure under such head being exempted from the quarterly control restrictions.

Also, it allows the Union government to procure the vaccines and pass them on to the states as grants in kind.

Refuting reports that no provision for expenditure on Covid-19 vaccination has been done by the central government, the finance ministry said, "vaccines have actually been, and are being, procured by and paid for by the Centre through this head of account (Demand for Grants No.40 Transfers to States)".

Since expenditure on vaccine is one-off expenditure outside the normal Centrally-Sponsored Schemes of the health ministry, separate funding ensures easy monitoring and management of these funds, the ministry noted.

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The amount provided under this head for vaccinations is operated by the Ministry of Health. Vaccines are passed on to the states as grants in kind and the actual administration of vaccines is being done by states, it said.

Further, there is enough administrative flexibility to change the nature of the scheme between grants in kind and other forms of grants, it said in a statement.

"The use of the Demand titled 'Transfers to States' in no way implies that expenditure cannot be incurred by the Centre," the ministry said.

Currently, Covid-19 vaccines are being provided free of cost by the Centre to those who are 45 years of age and above and to all frontline workers.

The Centre has so far provided more than 17.56 crore vaccine doses to states/ UTs free of cost.

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The Centre has placed total orders of 26.60 crore doses for Rs 3,639.67 crore with the Serum Institute of India which is manufacturing Covishield vaccine while an order for 8 crore doses involving an amount of Rs 1,104.78 crore has been placed with Bharat Biotech for Covaxin.

India is facing the world's worst outbreak of Covid-19 cases with more than 3 lakh new daily cases being reported for two weeks now and the new cases reached more than 4 lakh daily over the weekend. More than 2.46 lakh people in India have died from the virus infection.

Public health system is buckling under the weight of surging infections and deaths, with several parts of the country reporting shortage of hospital beds, medical oxygen, medicines and vaccines.