Union Finance Minister Nirmala Sitharaman in a press conference on Monday proposed several steps to revive demand in the economy.
According to the Finance Minister, the proposals are designed in such a way that they can stimulate demand by front-loading some of the expenditures. Meanwhile, some other steps are directly in line to increase GDP.
The consumer spending proposals will have two components: the LTC Cash Voucher scheme and the Special Festive Advance scheme.
The Leave Travel Concession (LTC) is available to government employees and organized sector employees.
Central Government employees get LTC in a block of 4 years in which air or rail fare, as per their pay scale and entitlement, is reimbursed. In addition, leave encashment of 10 days (pay + DA) is paid. But due to COVID-19, employees are not in a position to avail of LTC in the current block of 2018-21.
While announcing the scheme, Sitharaman said, “the biggest incentive for employees to avail the LTC cash voucher is that in a four-year block ending in 2021, the LTC not availed will lapse, instead it will encourage employees to avail of this facility to buy goods which can help their families.”
As per the government, the initial indications showed that savings have increased during the lockdown in the country and now the government wants to incentivize individuals.
The 7th pay commission does not have the Festive Advance scheme, however, the government is now reviving it. This time this scheme is for non-gazette employees as well as for gazette employees too.
The Festive Advance will be Rs. 10000 to all central government employees and must be repaid in 10 installments. It will be given as a prepay Rupay card and can use up to March 31, 2021. This scheme will be an interest-free amount.
