Finance Minister Nirmala Sitharaman has announced a one-time Rs 10,000 interest-free festival advance to all its officers and employees as part of plans to increase consumer spending to spur demand in the economy.
At a press conference on October 12, the union minister said festival advance was discontinued from 6th Pay Commission for central government employees. But as a one-time measure, an interest-free advance will be given to all officers and employees of the central government.
Sitharaman further announced a Rs 12,000 crore interest-free 50-year loan to states for spending on capital projects in a bid to boost the economy.
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Here are the key takeaways from the press conference:
> FM Sitharaman introduced proposals to stimulate consumer spending. It included the LTC Cash Voucher Scheme and Special Festival Advance Scheme.
> Under LTC Cash Voucher Scheme, the government employees can opt to receive cash amounting to leave encashment along with 3 times ticket fare, to buy items that attract a GST of 12 percent or more.
> The finance minister announced a one-time Rs 10,000 interest-free festival advance to all its officers and employees as part of plans to increase consumer spending to spur demand in the economy. This Rs 10,000 advance will come as a pre-paid RuPay card, which can be availed and spent by March 31, 2021.
> The repayment of the interest-free festival advance will be in 10 installments. Rs 4,000 crore is likely to be spent on this.
> A special interest-free 50-year loan to states for Rs 12,000 crore capital expenditure to be issued. It has three components:
> Out of the Rs 12,000 crore, Rs 1,600 crore will be given to north-eastern states and Rs 900 crore will be for Uttarakhand and Himachal Pradesh. Rs 7,500 crore will be for the remaining states. The remaining Rs 2,000 crore will be given to states that fulfill pre-stated reforms.
> The Rs 12,000 crore loan is over and above borrowing ceilings of the states and the repayment will be one bullet payment after 50 years.
