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Budget 2021: What Nirmala Sitharaman may announce for India's vaccination drive

Anwesha Madhukalya     February 1, 2021

One of the biggest announcements to look forward to on Budget 2021 would be India's vaccination drive. India has already started vaccinating its frontline and healthcare workers. The government has said that the vaccine would be provided free of cost for 30 crore frontline and healthcare workers but it is yet to be made clear if the coronavirus vaccine would be free for all beyond that. That would perhaps be one of the highlights of FM Nirmala Sitharaman's budget announcements.

The cost of free vaccination would, however, be heavy on the exchequer. Even when the two companies, Bharat Biotech and Serum Institute of India, are providing vaccine doses to the government on subsidised rates, vaccination costs for 1.3 billion people would be significant. On top of that the government must also take into account cost of infrastructure and logistics that would enable the drive.


To put this in perspective, one must go back to the stimulus package rolled out by the government last year. Indian economy was already undergoing a slowdown period before the coronavirus lockdown dealt a heavy blow. With the entire country under stringent lockdown, the economy came to a grinding halt. The government, in order to push the economy back on track, announced a Rs 20 lakh crore stimulus package. The stimulus took into account all sectors and industries and gave them a leg up. Even then, many experts believed that the government would be required to roll out more financial help considering the deep impact and the rupture of livelihoods of millions.

When the stimulus package was announced, coronavirus vaccine was still some months ahead. Now with the Rs 20 lakh crore bill as well as the vaccination drive, the government has a heavy burden to bear.

Serum Institute said that every dose would be given to the government at a subsidised rate of Rs 200. So, if 130 crore Indians are to be given Covishield then it would be Rs 52,000 crore. Bharat Biotech is offering the doses to the government for Rs 206, which would come to Rs 53,560 crore. A mix of both would also mean that the doses would come to be over Rs 50,000 crore. This does not take into account the logistical costs and cost of wastage. The government said that 10 per cent of coronavirus vaccines would go to waste.

India will also receive help from WHO-led COVAX global vaccine-sharing scheme. The alliance has assured help to poor and middle-income countries.


In order to replenish its coffers, the government is likely to announce a coronavirus cess. Preliminary talks on revenue increasing measures have been held but the final decision is likely on February 1. Meanwhile, many states have already imposed a coronavirus cess. Punjab imposed the cess on liquor, while Jharkhand imposed it on minerals. Delhi imposed a cess on liquor too but subsequently removed it.


What the Finance Minister along with the vaccination plan could announce are incentives for domestic pharma companies and homegrown healthcare product manufacturers. Mr. Nikhil Baheti, Global CFO, LAXAI Life Sciences said that the coronavirus that ravaged the economy also gave India an opportunity to become the supply partner for the world. "Every hurdle comes with an opportunity, higher the hurdle greater the opportunity. This unprecedented chaotic time too has come with a flip side of a huge opportunity to make India the preferred supply partner for the world. Government should use this opportunity and introduce a landmark budget helping this shift. Among other things it should focus on incentivising domestic Pharma purchases, push for Make In India, encouragement to start-ups and to facilitate better infrastructure. With proper measures, this Budget will play a major role in reducing the fiscal deficit and unemployment," he said.

Also read: Budget 2021 Live Updates: Nirmala Sitharaman ditches 'Bahi Khata' for 'Made in India' tab

Also read: Budget 2021: Date, time, sector-wise expectations; everything you need to know

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