Rs 73,000 cr package rolled out to revive consumer spending

GOI has announced a package totalling  Rs 73,000 crore to stimulate consumer spending to revive the Covid-19 induced economy. Disclosing this at a media briefing on October 12 at New Delhi, Minister for Finance & Corporate Affairs Nirmala Sitharaman along with her MOS Anurag Thakur said  ‘’A Special Festival Advance Scheme for gazetted & non-gazetted employees is being launched as a one-time measure to stimulate demand. All Central Government employees can now get an interest-free advance of Rs. 10,000, to be spent by 31st March 2021 on the choice of the festival of the employee. The interest-free advance is recoverable from the employee in a maximum of 10 installments.  ‘’ A Special interest-free 50-year loans to States for capital expenditure for Rs. 12,000 crores besides additional budget of Rs. 25,000 crores have also been announced. This is in addition to Rs. 4.13 lakh crore given in Union Budget 2020 as  Capital Expenditure. While announcing the demand stimulus package,  Sitharaman said, “Indications are that savings of government and organised sector employees have increased and we want to incentivise such people to boost demand for the benefit of the less fortunate. If demand goes up based on the stimulus measures announced today, it will have an impact on those people who have been affected by the pandemic and are desperately looking for demand to keep their business going’’, she said. The Government does not want to burden the common citizen with future inflation and also not put the Government debt on an unsustainable path. The proposals presented by the Finance Minister are designed to stimulate spending in a fiscally prudent manner as some of the proposals are for advancing or front-loading of expenditure with offsetting changes later while others are directly linked to increase in GDP. The announcement by FM  Sitharaman highlights the active intervention by the Government to combat the economic slowdown created by COVID-19. Central Government employees get LTC in a block of 4 years in which air or rail fare, as per pay scale/entitlement, is reimbursed and in addition, leave encashment for  10 days (pay + DA) is paid. But due to COVID-19, employees are not in a position to avail of LTC in the current block of 2018-21. Therefore, the Government has decided to give cash payment in lieu of one LTC during 2018-21. Full payment on Leave encashment and Payment of fare in 3 flat-rate slabs depending on the class of entitlement is ensured. An employee, opting for this scheme, will be required to buy goods/services worth 3 times the fare and 1 time the leave encashment before 31st March 2021. The scheme also requires that money must be spent on goods attracting GST of 12% or more from a GST registered vendor through digital mode. The employee is required to produce a GST invoice to avail the benefit, says an official statement. edited by PK Chakravarty

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