Festival bonanza for central govt employees: Rs 10,000 advance to all under LTC cash voucher
Finance Minister Nirmala Sitharaman on Monday announced two schemes to incentivize consumer spending and boost the country’s GDP as part of the Centre’s fresh economic revival push. Sitharaman also announced another measure to offer boost capital expenditure of states.
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.
“The proposals being presented are designed in a way that they can stimulate demand by front-loading/advancing some of the expenditure with some offsetting changes. Others are directly linked to an increase in the GDP,” she said.
Under the LTC Cash Voucher scheme, government employees can opt to receive cash amount to leave encashment plus three times the ticket fare, to buy items which attract a GST of 12 percent or more. Sitharaman went on to say that only digital transactions will be allowed and a GST invoice will have to be produced.
This means central government employees who are eligible to claim LTC will be able to avail leave encashment benefit in lieu of travel expenses. The money can thereafter be used by them towards discretionary spending.
"If Central government employees opt for it, this will cost around Rs 5,675 crore. The employees of PSBs and PSUs allowed to avail of this facility, and for PSBs and PSUs the cost will be Rs 1,900 crores. The demand infusion in the economy by central govt and PSUs will be approx Rs 19,000 crore," said Nirmala Sitharaman.
"Even if 50 percent of the States opt to give this facility, we think that this will bring in Rs 9,000 crores," she added. So the total benefit under the LTC Voucher scheme can be roughly Rs 28,000 crore. Another boost worth Rs 28,000 crore can be gained if the private sector chips in.