FinMin: Rs 35,000 crore budgeted demand for grant used by Centre to pay for vaccination

The Finance Ministry on Monday clarified that the Rs 35,000 crore shown in the budget as demand for grants has actually been used by the Centre to procure Covid vaccines and such grant has several advantages over other forms of funds provided in the budget.

"It is factually incorrect to state that there is no provision for expenditure on COVID-19 vaccination by the Central Government. The amount of Rs 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 ministry said in a statement.

The clarification came over reports that suggested that the entire grant provided in the budget was meant for transfers to states with the Centre having no funds to go buy vaccines on its own.

The Finance Ministry said that the use of this Demand for Grants has several administrative advantages. Firstly, because expenditure on vaccines 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, for ensuring adequate availability of funding for vaccination, the "budget classification does not really matter," the ministry said.

The use of the Demand titled `Transfers to States` in no way implies that expenditure cannot be incurred by the Centre, it added.