In a move to boost consumer demand in the economy during the holiday season, the government on Monday announced a series of schemes such as paying cash instead of LTC and ₹Advance of 10,000 festivals to government employees.
The advancement of the festival along with similar advancements were abolished on the recommendation of the seventh pay commission. But to stimulate consumer demand in an economy hit by the coronavirus pandemic, the government decided to restore it as a one-time measure.
“All Central Government employees can now get an interest-free advance of Rs. 10,000, which will be spent before March 31, 2021 on the employee’s choice of festival. The interest-free advance can be recovered from the employee up to a maximum of 10 installments, “the Finance Ministry said in a statement.
Employees will receive a preloaded RuPay card of the anticipated value. The government will bear the bank charges in this regard.
The Finance Ministry also said that the disbursement of advances through the RuPay card secures the digital payment mode, which generates tax revenue and encourages honest business.
The one-time disbursement of the Special Festival Advance Program (SFAS) is expected to amount to ₹4000 crore; and if the SFAS granted by all state governments, another tranche of ₹Rs 8 billion is expected to be disbursed.
In addition, the government also announced the delivery of cash vouchers to central government employees this year in lieu of the License Travel Concession Fee (LTC) that could only be spent on the purchase of GST-rated non-food items.
Finance Minister Nirmala Sitharaman said employees could buy items that attract 12% or more goods and services tax (GST). These purchases must be made in digital mode at points of sale registered in GST.
Every four years, central government employees take LTC to any destination of their choice plus one to their hometown.
Since travel is difficult to undertake during the pandemic, the government will pay the corresponding fee as cash vouchers that must be spent by March 31, 2021, he said. The central government payment in cash instead of LTC will be ₹5,675 crore and other ₹Central USPs and public sector banks will pay Rs 1.9 billion, the finance minister said.
Sitharaman also announced additional capital expenditures and ₹12 billion rupees, 50-year interest-free loan to states to boost the economy that has been hit by the pandemic and the resulting lockdown.
With contributions from the agency
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