Government Should Use RBI Balance Sheet for Covid Vaccine
The second wave of Covid-19 is creating ripples across the health infrastructure of the nation. The nation is scrambling hard to fulfill all types of medical resources, including the oxygen cylinders and hospital beds. Since the citizens and the world body are already blaming the government, the loss of lives is quite a tragedy.
In this chaos, vaccine policy is now under question. It is quite startling to see how the nation with a surplus of vaccine producers now faces a deficit one. According to Milton Friedman’s truism, if the central government is put in charge of the Sahara Desert, in the next five years, there will be a shortage of sand.
Currently, different states in India have different price tags for the same Covid-19 vaccine. This has certainly put pressure on the economic condition of the nation. Moreover, economists have been questioning the money for the vaccine. On the moral front, people are suffering from the lack of healthcare infrastructure during this unprecedented period.
Economically, the government of India keeps finding ways to finance expenditures but cannot find the money for such emergencies. The government had allotted Rs 35,000 crore for the Covid-19 vaccines. Sashi Sivramakrishna cited the Principles of Modern Monetary Theory when it comes to financing for the Covid-19. It also suggests that the country issues sovereign currency, making the government finance for covid-19 without restriction.
Currently, the RBI has a 60 lakh-crore balance sheet. Moreover, it has Rs 40 lakh crore exchange reserves. On the liability front, the RBI has Rs 30 lakh-crore deposits of banks and governments. India will now need to prepare for the third wave, get people vaccinated, and invest in the same.