Sitharaman announces incentives for Govt employees, interest-free 50-year loans for states

Ahe of festive season, Union Finance Minister Nirmala Sitharaman on Monday dressed a press conference anuncing an array of incentives for government employees in order to boost consumer spending in country. " proposals being presented are designed in a way that y can stimulate demand by front-loing and vancing some of expenditure with some offsetting changes. Ors are directly linked to an increase in GDP," said FM Sitharaman at start of press brief. 

Changes under Consumer spending

To boost consumer spending, Nirmala Sitharaman has anunced measures under two major schemes directed towards government employees.

• LTC Cash Voucher

"Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment plus 3 times ticket fare, to buy items which attract GST of 12% or more. Only digital transactions will be allowed and GST invoice to be produced," said Sitharaman.

Finance Minister ded that if Central govt employees opt for scheme,  cost would come up to Rs 5,675cr. Employees of PSBs & PSUs will also be allowed to avail this facility, and for PSBs & PSUs cost will be Rs 1,900 crores. " demand infusion in ecomy by central govt & PSUs will be approx Rs 19,000 cr. Even if 50% of States opt to give this facility, we think that this will bring in Rs 9000 crores," revealed Sitharaman.

• Special Festival vance Scheme

or changes have been introduced under Special Festival vance Scheme. Under this, interest-free vance of Rs 10,000 would be given as one-time measure and employees would be allowed to pay it back in 10 installments.

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Special Assistance to states

Meanwhile, in order to boost capital expenditure of states, Finance Minister anunced that Centre would offer interest-free 50-year loans to states to tune of Rs 12,000 crore. This has been expanded in three components.

• first part would be Rs 2,500 crore for rth East and Rs 9,000 crore for Uttarakhand and Himachal Presh. 
• second part would be Rs 7,500 crore for or states in proportion to share in Finance Commission devolution.
• third part would be an expenditure boost of Rs 2000 crore for states which meet at least three reforms under Aatmanirbhar fiscal deficit pack.

"We estimate that measures anunced today, for boosting consumer spending and capital expenditure, will boost demand by Rs 73,000 crores, to be spent by March 31, 2021," said Finance Minister Nirmala Sitharaman.

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(With ncy Inputs)