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'Vaccinating everyone above 18 to cost just 0.36% of GDP'
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SME Times News Bureau | 23 Apr, 2021
Vaccinating everyone above 18 in the phase III of the inoculation drive
will cost only about 0.36 per cent of the GDP, ratings agency India
Ratings and Research said.
As the second wave of Covid-19 sweeps
the country with alarming speed and severity, the Centre recently
announced a liberalised and accelerated phase III strategy of
vaccination.
Under this phase, all persons above 18 years of age will be eligible to get Covid-19 vaccine doses from May 1.
Consequently,
the total size of the population that will now be eligible for
vaccination would be 841.95 million out of the total population of
1,332.69 million.
As per Ind-Ra's calculations, vaccinating the
targeted group may cost Rs 671.93 billion, of which the Union government
is expected to spend Rs 208.70 billion and state governments together
will incur Rs 463.23 billion.
"The Union government has said that
under this scheme, the pricing, procurement, eligibility and
administration of coronavirus vaccines will be made flexible."
"While
the vaccination drive will continue as before, providing free
vaccination to priority populations such as healthcare workers,
frontline workers and population above 45 years of age, states and Union
Territories have been allowed to procure additional Covid-19 vaccine
doses directly from the manufacturers and open-up vaccination to people
above the age of 18 years."
As a result, Indian vaccine
manufacturers would now be supplying 50 per cent of their production to
the Indian government and the balance 50 per cent would available for
procurement by the state governments and the open market.
"Of the
total requirement of vaccines, a sum of Rs 50.90 billion has already
been spent for procuring 214 million doses; thus, the remaining amount
required to be spent for procuring 1,554 million doses would be Rs
621.03 billion."
"This is not a big amount as Rs 671.93 billion
and works out to be just 0.36 per cent of GDP. If we split it between
the Union government and state governments, then the fiscal impact on
the union budget would be 0.12 per cent of GDP and on the state budgets
would 0.24 per cent of GDP."
According to Ind-Ra, the maximum
impact is likely to be on Bihar followed by Uttar Pradesh, Jharkhand,
Manipur, Assam, Madhya Pradesh and Odisha.
"Since the antibodies
generated by these vaccines are likely to last for 12-18 months, this
expenditure would be a recurring expenditure on Union and state budgets.
However, many states such as Kerala, Chhattisgarh, Bihar and Madhya
Pradesh have already announced that the government will bear the cost
of vaccination."
"Vaccinations by large corporate groups will reduce pressure on state/central budget."
Besides,
Ind-Ra said given the magnitude of the problem and the economic cost
the second wave of Covid-19 pandemic is likely to inflict on the
economy, "it is too small an amount".
"However, more than the money spent, the critical factor would be how soon the desired level of vaccination can be achieved."
"Therefore,
the decision to allow the restricted emergency use of Russian vaccine
Sputnik-V and other vaccines approved by the US, EU and WHO is another
step in the right direction. This will only accelerate the vaccination
effort in the country."
The first batch of Sputnik V is expected to be delivered to India by April-end, it added.
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Customs Exchange Rates |
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56.85 |
As on 13 Aug, 2022 |
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