NEW DELHI: Tourism industry body FAITH on Monday said that the central government’s decision to redirect the Leave Travel Concession (LTC) funds of government employees in order to boost consumer demand sends a vote of no confidence to the tourism, travel, and hospitality industry, which had been hoping to get back on its feet after the lockdown.
The Federation of Associations in Indian Tourism & Hospitality added that since this is a 4-year block scheme, it will also cut away funds which would have been available for future travel demands once the blocking of LTC ended during the current financial year.
“After almost 8 months of nil-to-now very limited tourism activity, the festive season was one of the few demand drivers that the Indian tourism travel and hospitality industry was looking forward to. The industry was hoping for more tax-based stimulus in the hands of all citizens... Instead, this redirection the LTC money of government employees into buying consumer goods would dry up these funds for the travel sector,” FAITH said.
Finance Minister Nirmala Sitharaman on Monday announced the LTC Cash Voucher scheme, under which government employees can opt to receive the leave encashment plus three times the ticket fare, in order to buy items which attract a GST of 12 per cent or more. The government expects a demand generation of around Rs 28,000 crore in the economy through this Scheme. The private sector is also allowed to avail this scheme, according to the announcement.