In a major move to augment the availability of vaccines manufactured by two Indian companies, the finance ministry has cleared a proposal to give advance funds to the two firms manufacturing vaccines in India — Serum Institute of India and Bharat Biotech.
Sources in the finance ministry told India Today TV that there was a proposal for issuing an advance to the two pharma companies that require clearance from the ministry and in a rarest of rare case, the green signal has been given.
“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.
As per sources, the government relaxed the rules and has given clearance for a proposal of advance to the two companies “without bank guarantees”.
Post clearance from the finance ministry, the actual disbursement of the advance will be done by the Ministry of Health, which is the nodal ministry in this case.
Early in April, when Covid-19 cases started shooting up and demand for vaccine rose, world’s largest vaccine maker, Serum Institute of India, had sought Rs 3,000 crore grant from the Union government to ramp up manufacturing of Covishield vaccine beyond the 100 million doses/month rate that it will reach by the end of May.
As per a statement made before a Parliamentary panel, the health ministry recently had stated that Serum’s output is around 70-100 million doses a month. But the company had been managing to generate vaccines at 60-70 million doses a month.
SII CEO Adar Poonawalla had flagged the need for fiscal assistance recently and said that he would have to look at other sources of funds in form of bank loans and advances against supplies to increase capital expenditure and repurpose capacity.
Health ministry sources said that a proposal for Rs 4,500 crore advance to the two companies was sent to the finance ministry a few days back. Now that the clearance has arrived, SII is likely to get Rs 3,000 crore and Bharat Biotech Rs 1,500 crore.
Interestingly, the last time such a move was made was back in mid-90s, by the Narasimha Rao government. It eventually ended up in what’s infamously known as the Rs 133 crore fertiliser scam of 1995.
It was perhaps for the first time that a close relative of a former Prime Minister was convicted by the court in a scam that had unfolded right under the nose of law enforcement agencies. India Today