Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman

Will COVID-19 vaccine be free in India? Budget 2021 is unclear

An amount of Rs 73,931.77 crore has been allocated to the Ministry of Health and Family Welfare, while the last year’s budget estimate was Rs 67,111.8 crore.

In a move to boost the ongoing COVID-19 vaccination programme in the country, Finance Minister Nirmala Sitharaman on Monday announced that Rs 35,000 crore (4.7 billion USD) will be provided towards the vaccines. Presenting the Union Budget 2021-22, Nirmala Sitharaman said that the Union government is committed to providing further funds if required. The Union government plans to vaccinate 3 crore healthcare and frontline workers by August this year, through the vaccination drive launched on January 16. However, it is unclear whether the vaccines will be provided free of cost to all citizens. 

Apart from the Covishield and Covaxin vaccines currently being administered in the country, Nirmala Sitharaman said that at least two more vaccines are also likely to be authorised for use in India soon. “It is an added comfort to know that two or more vaccines are also expected soon,” she said. 

According to estimates by GAVI, the vaccine alliance (a public-private health partnership programme to provide immunisation to low- and middle-income countries), India will have to spend between 1.4 billion to 1.8 billion USD in the first phase of its vaccination programme even after accounting for the support it receives under the COVAX global vaccine-sharing scheme. Under the COVAX scheme, led by GAVI and the World Health Organisation (WHO), India will get a large proportion of vaccine doses. 

In the first phase of the vaccination programme, healthcare workers, frontline workers, people above 50 years of age and those with illnesses will get the vaccine. All vaccines in the first phase are being provided free of cost, including treatment in case of an adverse event following immunisation (AEFI). Although Rs 35,000 crore has been allocated in the Budget 2021-22, it is not clear if the vaccines will be free of cost in the following phases. 

Incidentally, in the Union government’s supplementary budget published in September 2020, an amount of about Rs 10,297.02 was specifically allocated for COVID-19, with Rs 350 crore earmarked for the health sector.  

Meanwhile, the Finance Minister announced that the budget outlay for “health and well-being” for 2021-22 stands at Rs 2,23,846 crore, which is a 137% increase against last year’s revised estimate of Rs 94,452 crore.  

However, these allocations also include various programmes related to access to nutrition and clean drinking water, tackling air pollution and waste management, among others. 

While the overall allocation towards the Department of Drinking Water and Sanitation has increased from Rs 21,518 crore in 2020-21 to Rs 60,030 crore (178% increase), the allocation towards nutrition fell by 27%, from 3,700 crore to Rs 2,700 crore. 

Break-up of allocations under 'health and well-being' in Budget 2021

The amount allocated to the Ministry of Health and Family Welfare for 2021-22 is Rs 73,931.77 crore. This includes allocations to the Department of Health and Family Welfare and the Department of Health Research. This marks a 10.16% rise compared to last year’s budget estimate (BE) of Rs 67,111.8 crore. However, the amount marks a 10.84% drop from last year’s Revised Estimate of Rs 82,928.3 crore. 

An amount of Rs 2,970.30 crore has been allocated for the Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH), a considerable increase of Rs 848.22 crore compared to last year, when the budgeted estimate for AYUSH was Rs 2,122.08 crore (the revised estimate came up to Rs 2,322.08 crore). 

Further elaborating on the details of health sector allocations this year, the Finance Minister announced that the centrally-sponsored scheme Pradhan Mantri Atmanirbhar Swasth Bharat Yojana will be implemented with an outlay of Rs 64,180 crore over six years. “This will develop capacities of primary, secondary and tertiary care health systems, strengthen existing national institutions, and create new institutions to cater to detection and cure of new and emerging diseases,” This scheme will be in addition to the National Health Mission (NHM). 

Some of the key interventions under the scheme will include setting up four National Institutes of Virology (NIV), 15 health emergency operation centres (EOC), integrated public health labs in all districts, 3,382 block public health units in 11 states, establishing critical care hospital blocks in 602 districts and 12 central institutions. The National Centre for Disease Control, its five regional branches and 20 metropolitan health surveillance units will also be strengthened.  

What experts say

A lot of experts have welcomed the government’s funding for the public sector in view of the pandemic.  

For the financial year 2020-21, the Union government allocated a budget of Rs 69,000 crore, which was 1.3% of the Gross Domestic Product (GDP). According to  Rohitashwa Prasad, Partner, J Sagar Associates, a law firm in Bengaluru, “The budgeted amount for FY 22 shows a significant increase. If this growth were to be extrapolated, the Indian government should achieve the target of healthcare spend of 2.5 – 3% of GDP (as envisaged in the National Health Policy 2017) well before its target date.”

Dilip Jose, the Managing Director and CEO of Manipal Hospitals, said, “Significant focus also has been brought to scaling up infrastructure, like critical care capabilities as well as primary and secondary care facilities through the PM Atmanirbhar Swasth Bharat programme. It is also very heartening that the FM promised higher allocations as required, as institutions absorb the funds committed at the first instance.”

Allocations for central sector and centrally-sponsored family welfare schemes, which includes the budgets for procurement and distribution of contraceptives to states, has been reduced by 35% from Rs 600 crores in FY 2020-21 to Rs. 387.15 crores in FY 2021-22. 

“This is concerning since to maintain the momentum of India’s performance in moving towards population stabilisation, investments in this area are critical,” said the Population Foundation of India, a non-governmental organisation that promotes formulating gender sensitivity and health development policies. According to one of its studies, “The Cost of Inaction in Family Planning in India”, India’s per capita GDP could rise an additional 13% by 2031 if family planning policies and investments were actively prioritised.

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