Festive advance, cash vouchers, more: How government plans to boost consumer demand

NEW DELHI: Union finance minister Nirmala Sitharaman on Monday announced a slew of measures for central government employees as part of its plan to increase consumer spending to spur demand in the economy.

“There are indications are that savings of government and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate,” Sitharaman said at a press conference in Delhi.

Here are the key announcements made by Sitharaman to stimulate consumer demand:

*Interest-free festive advance, cash vouchers in lieu of LTC: Rs 10,000 interest-free festival advance to all its officers and employees. But as a one-time measure, an interest-free advance will be given to all officers and employees of the central government, the finance minister mentioned.

* This Rs 10,000 advance will come as a pre-paid Rupay card, which can be availed and spent by March 31, 2021.

Government announces Rs 10,000 interest-free festival advance to employees

* The repayment will be in 10 instalments, she said, adding that Rs 4,000 crore is likely to be spent on the scheme.

*Cash vouchers to staff in lieu of LTC this year: The finance minister also announced giving out cash vouchers to central government employees this year in lieu of leave travel concession (LTC) fare which could be spent only on buying non-food GST-rated items.

* The employees could buy items that attract 12 per cent or more goods and services tax (GST). These purchases will have to be made in digital mode from GST-registered outlets.

* Every four years, central government employees get LTC to any destination to their choice plus one to their hometown.

* 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, she said.

* Central government payout on cash-in-lieu-for-LTC will be Rs 5,675 crore, and another Rs 1,900 crore will be payout by central PSUs and public sector banks, Sitharaman said.

Reported on 12th October 2020