Modi government announces Rs 10,000 interest-free festival advance to employees
NEW DELHI: The government on Monday 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, Finance Minister Nirmala Sitharaman 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, she said.
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 will be in 10 installments, she said adding that Rs 4,000 crore is likely to be spent on this.
In a bid to stimulate demand in the economy, the government also announced giving out cash vouchers to central government employees this year in lieu of leave travel concession (LTC) fare which could be spent only on buying non-food GST-rated items.
Finance Minister Nirmala Sitharaman said the employees could buy items that attract 12 per cent or more goods and services tax (GST).
These purchases will have to be made in digital mode from GST-registered outlets.
Every four years, central government employees get LTC to any destination to their choice plus one to their hometown.
Since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021, she said.
Central government payout on cash-in-lieu-for-LTC will be Rs 5,675 crore, and another Rs 1,900 crore will be payout by central PSUs and public sector banks, Sitharaman said.
The demand infusion because of this would be Rs 19,000 crore, and another Rs 9,000 crore if half of the states follow this guideline, she added.