Covid-19: Free vaccines, food to cost India an additional Rs 80,000 crore

As the intensity of the second wave of COVID-19 pandemic slows down, India is set to spend an additional Rs 80,000 crore to provide free vaccines and food to millions of people. Sources said the government will earmark an additional Rs 70,000 crore for providing food to the poor and other eligible groups until November, and Rs 10,000 crore to provide free vaccinations.




On Monday, Prime Minister Narendra Modi reversed a policy where state governments ended up competing for supplies for certain age categories, leading to severe shortages. As such, the Centre has been criticized for its handling of the second wave of infections.

Sources said that the government may not have to tap the bond market for the funds, with the Rs 99,120 crore dividend being the focus. The government received this from the central bank and expected inflows from asset sales. As such, the Centre will end up spending a total of Rs 1.3 lakh crore on providing food and Rs 35,000 crore has been set aside for vaccinations.

Also Read: Centre caps service fee for COVID-19 vaccination in private hospitals

Madhavi Arora, an economist with Emkay Global Financial Services Ltd, told TOI that despite the bumper dividend from the RBI and better growth numbers that should result in higher tax revenue, the fiscal math will likely worsen. “That’s because of higher payouts on food and fertilizer subsidies as well as for a rural-jobs guarantee program. There’s also a risk that the asset-divestment program could raise less money than anticipated,” she said. “Amid various push and pull, there is a likelihood of fiscal slippage, to the tune of around 0.5% from the initially budgeted 6.8% of gross domestic product.”