Finance Minister Nirmala Sitharaman on Monday announced LTC Cash Voucher and Special Festival Advance Scheme for government employees, in order to boost the consumer spending.
Addressing media in New Delhi, Sitharaman said, “Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment plus 3 times ticket fare, to buy items which attract GST of 12% or more. Only digital transactions allowed, GST invoice to be produced.”
Sitharaman said that there are indications that savings of government and organised sector employees have increased, “We want to incentivise such people to boost demand for the benefit of the less fortunate. We are presenting two proposals — the Leave Travel Concession (LTC) Cash Voucher Scheme and Special Festival Advance Scheme — to stimulate consumer spending.”
“The estimated cost of LTC Cash Voucher Scheme for central government is Rs 5,675 crore for PSBs and for PSUs it is Rs 1,900 crore. The tax concessions for LTC tickets are available for state government and private sector too, if they choose to give such facility, these employees too can benefit,” the finance minister added.
“On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of Rs 28,000 crore. The demand infusion in the economy by central government and PSUs will be approx Rs 19,000 crore. Even if 50 per cent of the states opt to give this facility, we think that this will bring in Rs 9,000 crore,” she elaborated.
In another significant move, the Special Festival Advance Scheme for non-gazetted employees is also being revived as a one-time measure, for gazetted employees too, Finance Minister said.
“All the central government employees can now get interest-free advance of Rs 10,000, in the form of a prepaid RuPay Card, to be spent by March 31, 2021,” she said.
The interest free advance of Rs 10,000 under the Special Festival Advance Scheme to be paid back in 10 installments.
“The one-time disbursement of Special Festival Advance Scheme is expected to amount to Rs 4,000 crore. If it is given by all state governments, another Rs 8,000 crore is expected to be disbursed Employees can spend this on any festival,” she added.
