The stretched finances of the state government is facing another challenge as the B S Yediyurappa administration will have to procure Covid-19 vaccines directly from the companies to inoculate those in the 18-44 age group.
Finance Department officials say that funds required for this purpose were not budgeted because they did not anticipate paying money for the crucial vaccine.
According to estimates, the state will need around 6.5-7 crore doses for people in the 18-44 age group. Karnataka has some 3.5 crore people in this age group.
Considering the price quoted by the Serum Institute of India (SII), which makes the Covishield vaccine in India, the two-dose vaccine would cost the government around Rs 2,600-2,800 crore to vaccinate the 18-44 age group, assuming that free vaccines will continue for those above 45 years, according to sources.
In the first phase, the government will procure one crore Covishield doses at a cost of Rs 400 crore, at Rs 400 per dose, from the SII.
Each person will receive two doses under the vaccination programme. While SII has offered the vaccine at Rs 400 per dose to state governments, it will cost Rs 600 per dose for private hospitals
The government is yet to decide whether vaccines will be free. This is likely to be decided in the next Cabinet meeting scheduled April 26. At least seven states, including BJP-ruled Uttar Pradesh, Assam and Madhya Pradesh, have announced free vaccines.
Karnataka slipped into severe financial stress in the 2020-21 fiscal due to the Covid-19 lockdown that brought economic activities to a standstill.
To a question on whether the government had made allocations for vaccines in the 2021-22 Budget that Yediyurappa presented in March, Additional Chief Secretary (Finance) ISN Prasad answer in the negative. “We were not told whether states should buy. Only recently has the Government of India asked states to procure,” he said.
Sources said that expenses due to the surge in Covid-19 cases during the ongoing second wave of the pandemic will also have a bearing on the state’s finances. It is likely that budgeted funds will be reallocated at the cost of development works.