NEW DELHI: Finance Minister Nirmala Sitharaman on Monday announced a slew of announcements to stimulate consumer spending and capital expenditure.
These included a special LTC cash voucher and a special festival advance scheme. LTC stands for leave travel concession.
Sitharaman said that the LTC funds could be used to spend on goods and items in 12 per cent GST category i.e. the government would give cash to employees in lieu of LTC ticket fare component for buying items attracting 12 per cent or more GST.
“Consumer demand needs to be given a boost,” Sitharaman said, adding that “To stimulate demand, expenditure will be front-loaded,” she said.
The two sops are expected to create a Rs 28,000 crore in additional demand.
Sitharaman said the LTC scheme for central employees will cost Rs 5,675 crore and Rs 1,900 crore for PSB officials.
In addition, the government will give Rs 10,000 as special festival advance all its employees as one-time measure to stimulate demand, the FM said.
The announcements with regards to capital expenditure included a special interest-free 50-year loans to states for special capital expenditure of Rs 12,000 crore. This would include a Rs 2,500 crore interest-free loans for North East region, Rs 1,600 crore for Uttarakhand and Rs 900 crore for Himachal Pradesh.
Sitharaman
said that the special assistance package could be used for new or
ongoing capital projects that need funds for settling contractors and
suppliers bills on such projects.
