“There are signs that the savings of government and organized sector employees have increased, we want to incentivize these people to drive demand for the benefit of the less fortunate,” Sitharaman told a news conference in Delhi.
These are the key announcements made by Sitharaman to stimulate consumer demand:
*Interest-free holiday advance, cash vouchers instead of LTC: Interest-free advance of the festival of Rs 10,000 for all its officials and employees. But as a single measure, an interest-free advance will be given to all central government officials and employees, the finance minister said.
* This 10,000 rupee advance will come as a prepaid Rupay card, which can be used and spent before March 31, 2021.
* The repayment will be in 10 installments, he said, adding that 4 billion rupees is likely to be spent on the scheme.
*Cash coupons for staff instead of LTC this year: The finance minister 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.
* Employees could purchase items that earn 12 percent 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 million rupees, and central PSUs and public sector banks will pay another 1,900 crore rupees, Sitharaman said.
* The demand infusion due to this would be Rs 19 billion, and another Rs 9 billion if half of the states follow this pattern, he added.
* 50-year interest-free loan to the states: Sitharman also announced a 50-year interest-free loan of Rs 12,000 crore to states to spend on capital projects in an attempt to boost the economy.
* Of the Rs 12,000 crore, Rs 1,600 crore will be delivered to the northeastern states and Rs 900 crore will be for Uttrakhand and Himachal Pradesh. 7.5 billion rupees will be for the remaining states. Rs 2 billion will be given to states that comply with pre-established reforms.
* The loan will have to be spent in its entirety on new or ongoing capital projects, the finance minister said, adding that states can settle contractor and vendor invoices, but the entire amount must be paid by March 31, 2021.
* The loan exceeds state debt limits and the repayment will be a one-time payment after 50 years, he added.
* The finance minister also announced an additional capital expenditure of Rs 25 billion by the central government.
* This will be in addition to the budgeted 4.13 lakh crore rupees, he said, adding that the additional money will be spent on roads, defense infrastructure, water supply and urban development.
.
