In a move to ramp up the manufacturing of vaccines, finance ministry cleared advances worth Rs. 4,500 crores to Serum Institute of India and Bharat Biotech. According to India TV, both Bharat Biotech and SII issued a proposal to finance ministry to give them an advance without any “bank guarantees”. The ministry took the bold and rare move of clearing advance of such a huge amount for the vaccine manufacturers.
Bold and rare move by Finance Ministry
“Such advances require finance ministry clearances as under the General Finance Rules, no such advances can be issued without bank guarantees,” said a top finance ministry official. Under the Financial Rules laid down by the Central Government, advances as huge as these are not given to contractors or private-for-profit companies without them providing a collateral or bank guarantee.
Rs. 3,000 crores to SII, Rs. 1,500 crores to Bharat Biotech
After the amount is cleared, the actual allotment of the advance will be done by the Health Ministry, which is the current nodal ministry in this issue. In the 4,500-crore advance, Rs. 3,000 crores will be given to SII and Rs. 1,500 crores will be given to Bharat Biotech.
#COVID19 | Finance Minister Nirmala Sitharaman today approved an advance payment of Rs 4,567.50 crores to Serum Institute of India & Bharat Biotech. Finance Ministry has approved Rs 3,000 crores for Serum Institute of India & Rs 1567.50 crores for Bharat Biotech: Sources
— ANI (@ANI) April 19, 2021
The move of clearing advance of Rs. 4,500 crore comes just a few days after the Centre announced financial assistance to India based vaccine manufacturers to bulk up their production of Covaxin. Hyderabad-based Bharat Biotech is the current manufacturer of Covaxin that was announced to be getting an assistance of Rs. 65 crores.
A couple of weeks ago world’s largest vaccine manufacturer Serum Institute of India had also asked for a financial assistance of Rs. 3,000 crores to increase their production for Covishield, that’s developed by AstraZeneca and Oxford.
Earlier SII and Bharat Biotech both had raised issues as they were not able to scale up their production of vaccines due to the lack of funds. These pharmaceutical giants wanted hefty sum of money to procure raw materials, pay salaries to staff and seal the logistics of vaccine distribution. The lack of vaccines was also highlighted by multiple states.
States with lack of vaccines amid rising infections
Maharashtra was one of the first few states that had issued an SOS (emergency) as the state had vaccines that could only last till 3 days. While the Maharashtra state authorities asked for Centre to give them more vaccines, Health Minister Harsh Vardhan had claimed that it was mismanagement on the State’s part that it had ran out of vaccines.
On April 10, Punjab had also issued another red flag, claiming that it had vaccine stocks that would only last for 5 more days. Punjab CM Amarinder Singh had warned the Centre that since the state had been vaccinating an average of 90,000 beneficiaries per day, it had a stock of 5.7 lakh vaccine doses remaining with them which would at that rate run out in 4-5 days.
“Very stressed at the moment”: SII CEO Adar Poonawalla
Earlier this month, Serum Institute’s CEO Adar Poonawalla spoke to NDTV where he claimed that he and his company was “Very stressed to put it quite frankly. The globe needs this vaccine and we are prioritizing the needs of India at the moment and we are still short”.
The vaccine manufacturer CEO said that the company needed another Rs. 3,000 crore to ramp up its vaccine production. However, it should be noted that Mr. Poonawalla had claimed that even if his company gets that amount, it would take the company time up till June to ramp up the production.
As of today, India is undergoing the world’s largest vaccination drive with two India manufactured vaccines- Covishield and Covaxin. While Covishield is developed by Oxford-AstraZeneca and manufactured by SII, Covaxin is manufactured by Bharat Biotech and developed by ICMR (Indian Council of Medical Research).
India steps into the 3rd Phase of Vaccination Drive
The okay of Rs. 4,500 advances to these two companies will help them in ramping up their capacities. This would be crucial in the days to come as India will be starting off its third phase of vaccination drive starting May 1. Under the third phase of the drive, every Indian above the age of 18 years will be eligible to get vaccinated.