Centre on Monday announced a slew of schemes to trigger economic revival via stimulus measures.
Sitharaman announced the LTC Cash Voucher and Festival Advance Schemes to encourage government employees to spend more and boost demand in the economy.
The LTC Cash Voucher Scheme divides the LTC fare component into three flat-rate slabs.
Sitharaman said if private sector also comes forwards with similar offering, another Rs 28,000 crore of demand would be generated.
In yet another step, the Special Festival Advance Scheme for government employees was restored as a one-time affair.
"Special Festival Advance Scheme for non-gazetted employees is being revived as a one-time measure, for gazetted employees too".
Besides, the Centre is ready to give a thrust to capital expenditure, she said. Out of the Rs 12,000 crore, Rs 1,600 crore will be given to north-eastern states and Rs 900 crore will be for Uttrakhand and Himachal Pradesh. This would leave a burden of Rs 2,400 crore to the exchequer.
"This fund will be over and above all other additional borrowing ceilings", she said. Employees will be allowed to use the card till March 31 after which it will lapse.
The Finance Minister said that central employees can buy items with a GST of 12% or more.
"Rs. 25,000 crore additional budget to be provided toward capital expenditure on roads, defense infrastructure, and domestically produced capital equipment, water supply, urban development".
Coming festive season government employees will receive interest-free advance of Rs 10,000 each that will help generate demand worth Rs 8,000 in the Covid affected economy.
It is worthwhile to mention here that under the recommendations of the 7th Pay Commission, any such advance was said to be prohibited.
As part of increasing consumer spending, Sitharaman announced two schemes - LTC Cash Voucher Scheme and Special Festival Advance Scheme - to primarily benefit central government employees.
As per the minister, the scheme would ensure digital mode of payment, resulting in tax revenue and encouraging honest businesses.
Government employees get Leave Travel Concession (LTC) every four years - to travel within India to a destination of their choice, and one trip to their hometowns, or two to their hometowns.
It was done away with when the seventh pay commission was introduced.
This can be used to settle bills of contractors or suppliers but it has to be spent before 31 March 2021.
As for the interest-free loan to states, SBI's Ghosh said the Rs 12,000 crore is minimal given the fact that this amount is only 1.6 percent of states FY21 budget estimate of capital expenditure of select 18 states.
The demand infusion because of this would be Rs 19,000 crore, and another Rs 9,000 crore if half of the states follow this guideline, she added.
Finance Minister Nirmala Sitharaman announced major schemes to boost demands in the country by almost 73 thousand crore rupees. The amount that will be granted is Rs 10,000 crore.
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