Finance Minister Nirmala Sitharaman announced Travel (LTC) cash voucher and special festival advance schemes for government employees in an attempt to stimulate demand and boost consumer spending ahead of the upcoming festive season. “Indications are that savings of govt. and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate,” the Finance Minister said.
Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment and 3 times ticket fare to purchase items that attract GST of at least 12 per cent.
If the central government employees opt for these benefits, this will cost around Rs 5,675 crore. The employees of PSBs & PSUs are also allowed to avail this facility, and for them, the cost will be Rs 1,900 crores. The demand infusion in the economy will be about Rs 19,000 crore, the finance minister pointed out.
The government has also announced a one-time restoration of the festival advance for central government employees through the Special Festival Advance Scheme, till March 31. The interest-free advance of Rs 10,000 will be given through a pre-loaded Rupay card and be recoverable in 10 monthly instalments. This is expected to generate demand amounting to at least about Rs 8,000 crore.
The finance minister’s press conference comes at a time when the country’s GDP or gross domestic product contracted a record 23.9 per cent in the April-June period as the quarter fully captured the damage caused by the coronavirus pandemic-related restrictions, and is expected to shrink an overall 9.5 per cent in the current financial year by the Reserve Bank of India.