Union FM Cuts COVID-Time Business Deals With Government Employees!

 


In a unique COVID-time measure to boost consumer demand in the pandemic-affected economy ahead of the festival season, the Union Finance Minister Nirmala Sitharaman offered a scheme of LTC (Leave Travel Concession) cash vouchers for shopping to all central government employees and PSU/PSB employees which is also open to be adopted by the state governments. This is apart from the grant of interest-free festival advance to the tune of Rs. 10,000/- in the form of loaded or pre-paid RuPay cards to all central government employees including the Gazetted segment, as a one-time measure which would be repayable in 10 equal installments.

 

The thoughtful move of offering LTC cash vouchers is very well justified in view of the fact that throughout the last few months of 2020 government employees are not availing the LTC benefits due to widespread travel restrictions and also due to the general fear of travel, even if the cost is to be paid by the government. Under LTC rules in a block of 4 years central government employees get one anywhere-in-India travel and one hometown travel or two hometown visits with fares paid in all modes of travel as per the entitlement of classes of the employees and ten days of leave encashment, and so this move ensures the utilization of the opportunities within the current block of 2018-21.

 

Under the LTC cash voucher scheme all central government employees can opt for cash payment in lieu of actual travel that has to be spent on shopping: an employee will get full payment for the 10-day leave encashment, if availed; an employee will then get cash payment for the fares for road/rail/air as per the three flat-rate slabs made for this purpose which would further be determined by the position/class/entitlement of the employee and the number of dependents in the family eligible for LTC; the payment for fares will be exempted from taxes; the employee will have to spend the full amount of leave encashment received and three times of the payment received for fares on purchase of non-food goods having a GST of 12% or more; the purchases must be made only through the digital mode and all purchases must be completed by the 31st of March 2021.

 

The Union Minister further informed in the media briefing today that if all central government employees opt for the scheme the total cost for the government would Rs. 5675/- crores. If employees of public sector banks and public sector undertakings also avail of this scheme the additional cost would be Rs. 1900/- crores, she added. About the expected demand infusion in the economy by this scheme the minister said that with central government and PSB/PSU employees the infusion would be around 19,000/- crores and an additional infusion of Rs. 9000/- would be generated if even half of the state governments adopt the scheme for their employees. Therefore, the total demand infusion should be around Rs. 28,000/- crores, she added.

 

The Finance Minister also announced an enhancement of the budgetary provision for capital expenditure by Rs. 25,000/- crores with the additional funds to be spent in a variety of sectors including roads, defence and infrastructure. Regarding benefits to the poor and the weaker sections of the society the minister said that all stimulant packages had already been announced for them, which is, of course, a debatable point. Overall, the announcements offer government employees a good opportunity to plan essential and choice shopping for the upcoming festivals and also to make sure their LTC benefits within the current block do not get lapsed.

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