The centre has given 100 per cent advance to two of India's Covid vaccine manufacturers till July, senior sources in the Finance Ministry told NDTV on Monday night.
The advance - calculated as Rs 3,000 crore for the Serum Institute (which produces Covishield) and Rs 1,500 crore for Bharat Biotech (which produces Covaxin) will ensure the two manufacturers get the funding necessary to continue, and scale up, production of vaccines, the sources said.
Both SII and Bharat Biotech will get the benefits "immediately", the sources confirmed.
Last week the centre also authorised a Rs 65 crore grant for Bharat Biotech's Bengaluru facility, which is being re-purposed to help scale up production of Covaxin.
The advances comes amid concerns SII and Bharat Biotech lack funds to scale up production - including purchasing raw materials, paying staff, and making and distributing the vaccine doses.
That concern was highlighted in recent weeks with states red-flagging low stocks of the vaccine.
This morning Punjab issued a second such alert, warning the centre it had only three days' stock. On Friday Andhra Pradesh said it had completely run out. Earlier this month Maharashtra said it had been forced to shut over 100 vaccination centres, including those in Mumbai and Pune.
The centre has previously insisted there is no shortage in vaccine stocks.
Earlier this month, however, Serum Institute CEO Adar Poonawalla told NDTV existing production capacities at his plant in Pune were "very stressed, to put it frankly". He said he needed time - around three months - and money - around Rs 3,000 crore - to scale up production by June.
Financial assistance to SII and Bharat Biotech comes as the centre opens up coronavirus vaccination - starting May 1 everyone over the age of 18 will be eligible to get the shot.
The dramatically-widened vaccine net (currently only those over 45 can get vaccinated) is expected to put pressure on manufacturers to supply the tens of millions of doses that will be needed.
It will also put pressure on the centre to co-ordinate supply to states, which is likely why state governments can now purchase vaccines directly from the manufacturers; they can sell up to 50 per cent of their stock - to states or in the open market - at a pre-agreed price.
The remaining 50 per cent will be for the centre - at the existing price of Rs 150 per vaccine - and be administered in centre-run hospitals, such as the AIIMS, where it will be given free of cost.
Finance Ministry sources said the decision to allow manufacturers to sell half their stock to states (or on the open market) comes after a request from them to not cap the selling price.
The manufacturers pointed out they'd invested a great deal of money in R&D and, in the case of SII, paying AstraZeneca for the patent to Covishield.
India's vaccination drive began January 16 with shots for frontline workers and healthcare staff.
Over 12.4 crore shots have been given since, but with the frightening spike in cases over the past few weeks - this morning over 2.7 lakh were reported in the previous 24 hours - the rate of vaccination has to be significantly increased if more infections and deaths are to be avoided.