{"id":12084,"date":"2020-10-16T12:36:03","date_gmt":"2020-10-16T12:36:03","guid":{"rendered":"\/blog\/?p=12084"},"modified":"2023-06-19T07:18:34","modified_gmt":"2023-06-19T07:18:34","slug":"government-to-spend-rs-37000-crore-give-sops-to-spur-festive-demand","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/personal-use-loan\/government-to-spend-rs-37000-crore-give-sops-to-spur-festive-demand\/","title":{"rendered":"Government to spend Rs 37,000 crore, give SOPs to spur festive demand"},"content":{"rendered":"\n<p>In a bid to step-up consumer spending and\ndemand, the Finance Minister announced a few government schemes for employees as part of a new\neconomic stimulus package on October 12, 2020. The FM\u2019s press conference sought to address some of the economic issues\nfaced by the country due to the ongoing COVID-19 pandemic. Here are a few\nimportant highlights from the media briefing.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Stimulation of consumer demand<\/strong><\/h2>\n\n\n\n<p>The Finance Minister via the press conference\nannounced two major schemes targeting government employees &#8211; the LTC cash\nvouchers scheme and the special festival advance scheme. Here\u2019s an in-depth\nanalysis of these two festival bonanza schemes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. LTC cash vouchers scheme&nbsp;&nbsp;&nbsp;<\/h3>\n\n\n\n<p>Employees working with the central government of\nIndia are entitled to receive Leave Travel Concession (LTC), which is a\nmonetary benefit offered to compensate for the cost of travelling to any place\nin India. A government employee can claim LTC twice in every block of four\nyears. It covers the rail fare or airfare, in accordance with the employees\u2019\npay scale. Additionally, the LTC also pays out the basic pay plus dearness\nallowance components of the employees\u2019 salary for up to 10 days as a leave\nencashment benefit.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>Since travelling is not feasible in the current\nsituation due to the risk of contracting COVID-19, many government employees\nwere not able to claim LTC for the current block of four years starting from\nthe year 2018 to the year 2021. Taking this present scenario into\nconsideration, the central government has announced the LTC cash vouchers\nscheme.&nbsp;<\/p>\n\n\n\n<p>According to this, a government employee that\u2019s entitled to receive a Leave Travel Concession during the current block of four years can opt to receive cash for one LTC claim instead.\u00a0<\/p>\n\n\n\n<p><strong>Here are some of the key points from this scheme.&nbsp;<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>An employee\ncan claim the full leave encashment benefit (basic pay + DA) for 10 days.&nbsp;<\/li><li>The fare\nfor travel would be paid in three flat-rate slabs according to the employee\u2019s\npay scale and entitlement.&nbsp;<\/li><li>The amount\nthat is paid as fare for travel shall be completely free from tax.&nbsp;<\/li><li>If an\nemployee opts for this scheme, he or she would have to purchase goods or\nservices that are worth three times the travel fare and one time the leave\nencashment amount before March 31, 2021.<\/li><li>The cash in\nlieu of LTC offered by this scheme shall be used only to purchase goods or\nservices that attract 12% GST or more.&nbsp;<\/li><li>Additionally,\nthe purchase must be made only from a vendor that is registered under the GST\nscheme.<\/li><li>The\npurchase should be made only through digital payment modes and a GST invoice\ncorresponding to the purchase will also have to be submitted.&nbsp;<\/li><\/ul>\n\n\n\n<p>Assuming that the employees of all central\ngovernment institutions opt for this scheme, the total outlay would therefore\ncome up to Rs. 7,575 crores. This scheme is likely to give some much-needed\nimpetus to the economy by boosting the demand by Rs. 28,000 crores.<\/p>\n\n\n\n<p><strong>Additional Read:<\/strong><strong> <\/strong><a href=\"https:\/\/tata-blog.osian.dev\/blog\/government-regulations\/what-are-the-measures-taken-by-the-finance-ministry-to-tackle-coronavirus-in-india\/\">What\nare the Measures Taken by the Finance Ministry to Tackle Coronavirus in India?<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Special festival advance scheme&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/h3>\n\n\n\n<p>Since the festival season is just around the\ncorner, the government has proposed a scheme that would enable its employees to\nreceive cash, which they can then redirect use towards the purchase of goods\nand services.<\/p>\n\n\n\n<p>According to the special festival advance\nscheme, all non-gazetted employees of central government institutions would\nreceive an advance of Rs. 10,000. However, the amount would be in the form of a\npre-loaded RuPay card instead of cash to promote digital spending. The advance\namount received by the employees should be used before March 31, 2021. While\nthe special festival advance of Rs. 10,000 does not carry any interest, it has\nto be paid back by the employees in 10 instalments.&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>The total estimated outlay for the central\ngovernment on account of the introduction of this scheme would amount to\napproximately Rs. 8,000 crores. The government expects that this would directly\nlead to a demand boost worth Rs. 8,000 crores.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Measures to boost capital expenditure<\/h3>\n\n\n\n<p>The government of India expects that both of\nthese schemes together would likely usher in a boost in consumer demand to the\ntune of Rs. 36,000 crores. In addition to these two schemes, the Finance\nMinister also announced a couple more schemes worth Rs. 37,000 crores with a\nfocus on increasing capital expenditure made by the states and the\ncentre.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>The details of these schemes are as follows.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Incentive\nto states worth Rs. 12,000 crores<\/li><li>Increase in\ncentral capital expenditure worth Rs. 25,000 crores<\/li><\/ul>\n\n\n\n<p><strong>Additional Read:<\/strong><strong> <\/strong><a href=\"https:\/\/tata-blog.osian.dev\/blog\/personal-loan\/5-ways-you-can-use-loans-to-add-to-the-festivities\/\">5\nWays You Can Use Loans to Add Spark to the Festivities<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion&nbsp;&nbsp;&nbsp;&nbsp;<\/strong><\/h2>\n\n\n\n<p>If you\u2019re a private sector employee or a self-employed professional, these schemes may not be directly applicable to you. Nevertheless, you could still splurge and treat yourself a little during this festive season. A <a href=\"https:\/\/tata-blog.osian.dev\/personal-loan.html\">personal loan<\/a> from Tata Capital can help you meet these short-term liquidity needs.  <\/p>\n\n\n\n<p>With several advantages like zero collateral requirement, attractive <a href=\"https:\/\/tata-blog.osian.dev\/personal-loan\/rates-and-charges.html\">personal loan interest rates<\/a>, no fees on part prepayments and a quick and simple application process, the personal loan products from Tata Capital are specifically designed to make it easier for you to fulfill your needs and goals.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a bid to step-up consumer spending and demand, the Finance Minister announced a few government schemes for employees as part of a new economic stimulus package on October 12, 2020.  <\/p>\n<p><a href=\"https:\/\/tata-blog.osian.dev\/blog\/personal-loan\/government-to-spend-rs-37000-crore-give-sops-to-spur-festive-demand\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":12085,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-12084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-use-loan"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Government to spend Rs 37,000 crore &amp; give SOPs to spur festive demand - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Festival bonanza for Central Govt Employees: Rs 10,000 Advance To All; LTC Cash Voucher Scheme Announced. 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