The country’s GDP or gross domestic product contracted a record 23.9% in the April-June perio
Finance Minister Nirmala Sitharaman announced on Monday two special plans for government personnel in a bid to boost consumer demand: a cash voucher related to the travel concession and an advance for the festival. The schemes are likely to lead to an additional consumer demand of Rs 36,000 crore by March 31, 2021, helping those in need due to the coronavirus pandemic. Employees of central and state governments, as well as public sector companies, will be able to use these plans to spend money at festivals of their choice until March 31.
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“There are indications that the savings of government employees and the organized sector have increased, we want to encourage these people to boost demand for the benefit of the less fortunate,” said the Finance Minister.
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Under the LTC cash voucher scheme, government employees can choose to receive cash for the license fee and three times the ticket fee to purchase items that attract a GST of at least 12%.
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This amount can only be spent on the purchase of GST-rated non-food items and purchases will have to be made in digital mode at GST-registered outlets, the Finance Minister said.
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The money was originally intended to be used by government employees for permits that were wasted due to restrictions related to the coronavirus pandemic.
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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, Sitharaman said.
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These benefits will cost the government around 5,675 million rupees. The government has also allowed public sector companies, such as state banks, to take advantage of this facility. For them, the cost will be Rs 1.9 billion.
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The Finance Minister also announced the reintroduction of a festival advance for central government employees through the Special Festival Advance Program, until March 31. This advance was abolished according to the recommendations of the Seventh Committee on Payments.
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As a single measure, an interest-free advance will be given to all central government officials and employees, the finance minister said.
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Under this scheme, an interest-free advance of Rs 10,000 will be given to government employees via a pre-loaded RuPay debit card. This money will be recoverable in 10 installments, until March 31. Spending on this is estimated at Rs 4,000 crore, according to the government.
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The announcements come at a time when the country’s GDP or gross domestic product contracted a record 23.9 percent in the April-June period, as the quarter fully captured the damage caused by restrictions related to the coronavirus pandemic. The RBI has said that GDP is likely to contract 9.5 percent in the current financial year.
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