Finance Minister Nirmala Sitharaman announced two special schemes for government staff in a bid to boost consumer demand: a Leave Travel Concession-related cash voucher and a festival advance.
On Monday, Finance Minister Nirmala Sitharaman announced two special schemes for government staff in a bid to boost consumer demand: a Leave Travel Concession-related cash voucher and a festival advance. By March 31, 2020, the schemes are likely to lead to additional consumer demand of ₹ 36,000 crore, which will help those in need in midst of the coronavirus pandemic. These schemes can be used by employees of central and state governments as well as public sector companies, to spend money on festivals of their choice till March 31.
“Indications are that savings of government and organised sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate,” the Finance Minister told on Monday.
Government employees, under the LTC cash voucher scheme, can opt to receive cash amounting to leave encashment and three times the ticket fare to purchase items that attract GST of at least 12 per cent. The amount can be spent only on buying non-food GST-rated items and the purchases will have to be made in digital mode from GST-registered outlets, the FM said.
Originally meant to be utilised by government employees for leaves, the money got wasted due to the coronavirus pandemic-related restrictions.
FM SItharaman said since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021.
The government will bear a cost of Rs. 5,675 crore to provide these benefits. Public sector companies such as state-run banks have also been allowed to avail of this facility. For them, the cost will be ₹ 1,900 crore.
The festival advance for central government employees, which was abolished as per 7th Pay Commission recommendations, has been reintroduced through the Special Festival Advance Scheme, till March 31.
The FM said that as a one-time measure, an interest-free advance will be given to all officers and employees of the central government.
An interest-free advance of ₹ 10,000, under the scheme, will be given to government employees through a pre-loaded RuPay debit card. The government can recover the money in 10 instalments, till March 31. According to the government, the expenditure on this is estimated at around Rs. 4000 crore.
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