Finance Minister Nirmala Sitharaman made several important announcements today to increase the demand in the economy. In a press conference today, he said that several steps are being taken to increase the demand in the economy. Measures are being taken to increase consumer spending and capital expenditure to stimulate demand. The government has brought Travel Leave Allowance (LTC) cash vouchers and festival advance scheme. The Finance Minister said that the government will spend Rs 5,675 crore for LTC. At the same time, central public sector undertakings and banks will have to spend an estimated Rs 1,900 crore on this facility. He said that the move would generate a demand of Rs 19,000 crore. At the same time, the choice of this scheme by the state government employees will create a demand of Rs 9,000 crore.
Under LTC Cash Voucher Scheme, govt. employees can opt to receive cash amounting to leave encashment + 3 times ticket fare, to buy something – items which attract GST of 12% or more
Only digital transactions allowed, GST Invoice to be produced
– FM @nsitharaman pic.twitter.com/qj4VHOLz4z
– PIB in Maharashtra 🇮🇳 (@PIBMumbai) October 12, 2020
What is LTC plan
Under the LTC scheme, the government employee will get a cash boucher, which will enable them to spend and it will also give a boost to the economy. It will also benefit the employees of PSUs and public banks. Explain that cash payment in lieu of LTC which will be digital. It will be for 2018 to 2021. Under this scheme, the fare of the train or plane will be paid and it will be tax free. For this, the rent and other expenses of the employee should be tripled.
The government decided to give cash vouchers
Every four years, the government gives LTC to its employees to travel to a destination of their choice. In addition, an LTC is given to them to visit their home state. Sitharaman said it is difficult for employees to travel this year because of the Kovid-19 epidemic. In such a situation, the government has decided to give them cash vouchers. It will have to be spent by March 31, 2021. Central public sector undertakings and banks will also give cash to their employees in place of LTC. In addition, the government has announced a grant of 10,000 rupees as festival advance to all its officers and employees. Sitharaman said that these two measures are likely to generate consumer demand of Rs 28,000 crore. Employees can also take LTC to visit their home state twice. Employees are paid airfare or train fare according to their rank or eligibility.
Vouchers not used to buy food products
The finance minister said in a press conference that the government will give income tax-free cash vouchers to its employees in lieu of LTC. Employees can use these vouchers to buy products that have a GST rate of 12 percent or more. This condition means that employees cannot use this voucher to purchase food products.
Government will pay full leave encashment to employees
Sitharaman said that every four years the government gives LTC to its employees to travel to a destination of their choice. In addition, an LTC is given to them to visit their home state. On an LTC, the government will pay the employees’ leave encashment in full. And will also pay rent on the basis of three slabs. Sitharaman said that employees opting for this scheme would have to purchase goods or services equal to three times the rent and one fold of leave encashment by March 31, 2021. This amount will have to be spent on products on which GST is 12 percent or more.
Apart from this, the government has decided to give interest free advance of Rs 10,000 to all its officers and employees on the occasion of festivals. Sitharaman said that the system of giving advance for the festival to the Central Government employees was abolished following the recommendations of the Seventh Pay Commission. He said that as a one-time measure, the government has decided to give an interest-free advance of Rs 10,000 to all officers and employees. He said that this advance of Rs 10,000 will be in the form of a pre-paid RuPay card. It will have to be spent by March 31, 2021.
Read also: Modi government gift before Diwali, will give Rs 10,000 to employees
Sitharaman said that LTC voucher scheme will generate Rs 28,000 crore and advance for festivals will create additional consumer demand of Rs 8,000 crore, ie a total of Rs 36,000 crore. Apart from this, additional capital expenditure of Rs 37,000 crore will be incurred by the Center and the states. This will give a boost of Rs 73,000 crore to demand by 31 March 2021.
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