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Government centralizes vaccination program again and extends PMGKY

* On 7th Jun’21, the Prime Minister announced that the Union government will centralize 75% of the vaccination program and make it free for all eligible citizens beginning 21st Jun’21. The government has so far allowed vaccination for citizens above 18 years of age.

* The Prime Minister specified that remaining 25% will be kept aside for private organizations to procure. However, he capped their service charge to a maximum of INR150/doze over the fixed price of the vaccine.

* This decision to centralize 75% of the procurement comes on the back of states struggling to procure vaccines from global suppliers. On 1st May’21, the central government had allowed states to procure 25% of vaccines from vaccine makers. However, as per some newspaper articles, global vaccine manufacturers conveyed they will deal only with the central government.

* So far, a total of 233m people in India have been vaccinated. This accounts for ~17% of the total population (assuming India’s total population is 1.4b persons).

* Under the PM Garib Kalyan Ann Yojana, the PM announced that free food distribution would be carried out till Nov’21, thus, extending it by another five months. It had already announced free food for two months (May’21-Jun’21) on 23rd Apr’21 costing INR260b. The additional cost between Jul’21 and Nov’21 is likely to be ~INR650b, taking the total cost of free food distribution between May’21 to Nov’21 to ~INR910b.

* With this, the central government has announced ~INR2.3t worth of free food distribution in the economy between 26th Mar’20 and 7th Jun’21.

* The government’s decision of taking 75% responsibility of vaccine procurement might mean that import of vaccines from global suppliers becomes a much smoother process. This will hopefully accelerate the vaccination program and the vexing issue of demand exceeding supply may be solved in coming months.

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