By Priyanka Sambhav
Finance Minister Nirmala Sitharaman announced two special schemes to put some extra money on your pocket and spur the consumer demand. The two schemes are – LTC cash voucher and Festival Advance scheme.
Under the LTC cash voucher scheme government will provide relief on the leave travel concession component of a central government employee. Central government employees get leave travel concession in a block of four years–one each to a destination of choice and home town or two for home town. Due to COVID 19 people didn’t travel, and the tax-free claim of LTC in the block of 2018-21 remain unutilised for many employee. So in lieu of unused LTC government will give cash voucher. There will be full payment on leave encashment and fare will be paid as per three slabs depending upon the class of entitlement. Further, there will be no tax on fare payment.
One needs to spend this money by 31st March 2021 and while spending you need to ensure-
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You have to buy goods and services worth three times the tax-exempt amount paid before 31.3.2021.
- Only non-food item purchase from GST registered outlet is allowed
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Goods attracting GST of 12% and above can be bought
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Only digital payments will be permissible
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Employees will have to provide GST invoice
These benefits will cost the government around Rs 5,675 crore. The government has also allowed this for PSU’s and PSB’c and if they also avail it then for them the expenditure would be Rs 1900 crore. But government is assured that this step has the capacity to generate a demand of Rs 28,000 Crore.
The second major announcement has been Special Advance Festival Scheme which was abolished on the recommendation of 7th Pay commission but it has been restored for this year. Under this the central government employees will receive an interest-free advance of Rs 10,000, this amount will be given as a pre paid Rupay card. Employee has to return this money in 10 instalments. No interest will be charged.
With this scheme, government expects to disburse Rs 4,000 crore. According to the finance ministry, if all states provide similar advance, another Rs. 8,000 crores is likely to be spent.
Government is hoping that these steps will have a ‘multiplier effect’ on the economy and will generate consumer demand.
