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It is factually incorrect to state that there is no provision for expenditure on COVID-19 vaccination by the Central Government: Finance Ministry

May 10, 2021
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It is factually incorrect to state that there is no provision for expenditure on COVID-19 vaccination by the Central Government: Finance Ministry

Amount of ₹ 35,000 crore shown under Demand for Grants No. 40, titled ‘Transfers to States’ ; use of this Demand for Grants has several administrative advantages

The use of the Demand titled ‘Transfers to States’ in no way implies that expenditure cannot be incurred by the Centre

This is with reference to the media report in ‘The Print’ entitled “The reality of Modi Government’s vaccine funding: ₹ 35,000 crore for States, zero for Centre.”

It is factually incorrect to state that there is no provision for expenditure on COVID-19 vaccination by the Central Government.  The amount of ₹ 35,000 crore has been shown under the Demand for Grants No. 40, titled ‘Transfers to States’.  Vaccines have actually been, and are being, procured by and paid for by the Centre through this head of account.  The use of this Demand for Grants has several administrative advantages. Firstly, because 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.  Also, this grant is exempted from the quarterly expenditure control restrictions applicable to other demands. This helps to ensure that there is no hindrance in the vaccination programme. The amount provided under this head for vaccinations is actually 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. Further, there is enough administrative flexibility to change the nature of the Scheme between grants in kind and other forms of grants. 

Therefore, as pointed out in the report itself, for ensuring adequate availability of funding for vaccination, the “budget classification does not really matter”. The use of the Demand titled ‘Transfers to States’ in no way implies that expenditure cannot be incurred by the Centre.

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