Tribune News Service
New Delhi, October 12
The Union Government on Monday announced a one-time Rs 10,000 interest-free festival advance and cash vouchers in lieu of LTC for its employees as part of a Rs 73,000-crore stimulus to boost consumer spending.
Addressing a press conference, Union Finance Minister Nirmala Sitharaman said Rs 12,000 crore interest-free 50-year loans would be given to states for spending on capital projects. Both LTC scheme and festival advance come with riders. As travel is restricted, the scheme mandates purchases worth three times the fare and one time the leave encashment by March 31, 2021. The vouchers will have to be spent on goods that attract 12 per cent or more GST — a condition that eliminates the possibility of the money being spent on food items.
Helping the poor
We want to incentivise people to boost demand for the benefit of the less fortunate. — Nirmala Sitharaman, FM
Rs 450 cr for HIMACHAL
Of Rs 12,000 crore 50-year loans to states, Himachal Pradesh and Uttarakhand will get an assured loan of Rs 450 crore each. The eight Northeastern states will also get Rs 200 crore each.
The cost for the Centre will be Rs 5,675 crore and its extension to PSU and bank staff will cost another Rs 1,900 crore. The interest-free advance will be preloaded on RuPay cards and will be recoverable in 10 installments. The government will bear the bank charges. The expenditure is estimated at Rs 4,000 crore and Rs 8,000 crore more, if states follow suit. The two measures would generate a consumer demand of Rs 28,000 crore, said Sitharaman.
The actual outgo from the today’s announcements is about Rs 11,500 crore for individuals and Rs 12,000 crore for states. An additional Rs 25,000 crore capital expenditure was passed by Parliament last month. The rest is based on the assumption of a three-time multiplier effect and the expectation that states and PSUs may give similar concessions.
The 50-year loan to states will consist of three parts. The first provides for Rs 200 crore each for eight Northeast states and Rs 450 crore each for Himachal and Uttarakhand. The second allocates Rs 7,500 crore to other states as per the devolution formula. Under part three, Rs 2,000 crore will go to states fulfilling at least three out of four reforms under the Aatmanirbhar Bharat Package. Sitharaman also included Rs 25,000 crore announced in the Supplementary Budget last month to this mini stimulus package.