New Delhi: While poorer states with high population would not be able to vaccinate themselves quickly through this approach, richer states may have to pay a much steeper price given the global oligopolistic market, the research wing of State Bank of India (SBI) said in its ‘Ecowrap’ report released on Friday.
It advised that India should follow the European Union (EU) template for vaccine procurement, and the Centre, in coordination with states, should enter into deals with pharma companies to vaccinate a sizeable population.
“Globally, the EU Commission jointly with a Joint Negotiation Team carries out the negotiations with vaccine suppliers. The members of the Joint Negotiation Team – representing seven Member States – are appointed by a Steering Committee. The Steering Committee discusses and reviews all aspects of the Advanced Purchase Agreement (APA) contracts before signature. All EU Member States are represented in this Committee. All Member States have endorsed this approach, which is at the heart of the EU Vaccines Strategy,” the report said.
Taking the vaccine’s price in the range of $2 to $40 as per the UNICEF’s website, the report analysed different scenarios with different price ranges at $5, $10, $20, $30 and $40, with the rupee dollar exchange rate of 73, and assuming that Centre gives 50 per cent of the vaccines for the states’ population.
As per the scenario analysis and the budgeted FY22 total expenditure of 20 major states, “at the highest price point, the vaccine procurement is 16 per cent of the total expenditure for Bihar, 12 per cent for states like Uttar Pradesh and Jharkhand”, the report said, adding that this expenditure is an absolute must as even at highest vaccine price, the total vaccination cost at Rs 3.7 lakh crore is much lower than revenue loss at Rs 5.5 lakh crore assuming lockdown for states end mostly by June.
“…the budgeted capital expenditure of Rs 8.8 lakh crore could see a significant rollback to balance revenue loss, further exacerbating GDP loss. Additionally, the payment though will be made in domestic rupee resources, it would possibly imply equivalent dollars from our reserves to make the payment! However, such payments could potentially trigger a renewed interest of capital flows into India as investors will look through the huge benefits of such mass vaccination,” Ecowrap said.
