Center Announces Rs 10,000 ‘Festive Advance’, ‘LTC Cash Voucher’ Schemes To Increase The Demand
New Delhi : The central government has made several important announcements today to increase the demand in the economy. Finance Minister Nirmala Sitharaman said in a press conference today that several steps are being taken to increase the demand in the economy. To stimulate demand, the government is taking measures to increase consumer spending and capital expenditure. The government has brought LTC cash vouchers and festival advance schemes.
4 major steps –
The government has taken a total of four steps to increase demand in the economy –
1. Cash vouchers in lieu of LTC of government employees,
2. Festival advance to employees,
3. Loan to State governments without interest for up to 50 years,
4. Apart from the capital expenditure fixed in the budget, the Center to spend an additional 25 thousand crore rupees on infrastructure development etc.
She hoped that all these steps will create a demand of about 73 thousand crore rupees in the economy by 31 March 2021. She said that if the private sector also gave relief to its employees, then the total demand in the economy could cross Rs 1 lakh crore.
What is LTC plan
Cash vouchers scheme of Travel Leave Allowance (LTC) has been brought by the government. Under this, the government employee will get a cash voucher which they will be able to spend and this will also increase the economy. The employees of PSUs and public banks will also get the benefit of this.
Cash payment in lieu of LTC will be done digitally. It will be for 2018-21. Under this, 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 three times. Similarly, goods or services will have to be taken from the GST registered vendor and payment should be digital, the Finance Minister said that this will generate about 28 thousand crore rupees demand in the economy through the expenses of Central and State employees.
What is festive advance
The Finance Minister informed that the Festival Advance Scheme is being started once again for this year only. Under this, an advance of 10 thousand rupees will be given to all employees, which they can return in 10 installments. It will be available till 31 March 2021. It will be given as a prepaid RuPay card.
Loans to states without interest
The Finance Minister said that the increase in capital has many effects on the economy. This has an impact not only on the current GDP but also on the future GDP. 50 years of interest free loan will be given to the states for capital expenditure of Rs 12 thousand crore.
It will have three parts – 2500 crore rupees will be given to Northeast, Uttarakhand and Himachal. After this, 7500 crore rupees will be given to other states as per the recommendation of Finance Commission. Third, a share of Rs 2,000 crore will be given to those states which will implement at least 3 out of four reforms declared under the self-reliant program. This entire loan will be given before 31 March 2021. This will be in addition to the loan already available to the states.
Capital expenditure increased in budget
The Finance Minister said that in addition to the capital expenditure of the Central Government fixed in the budget this year, the government will give an additional Rs 25,000 crore. This will be especially for roads, defence infrastructure, water supply, urban development, capital equipment built in the country of defence.
Improvement in economy
Recently several good signs have come out on the economy front. It has been found that PMI giving manufacturing data has improved, PMI of the service sector has improved, and power consumption has also increased.
