GOI announces new measures to boost consumer demand and capital expenditure


In order to boost the demand side of the economy, the government today proposed measures to stimulate consumer demand along with additional capital expenditure that could cushion the economy from the pandemic blow.

A. Consumer spending

1. LTC Cash Voucher Scheme

1)Incentivising government and organised sector employees by making cash payment
2) For 2018-21, full payment of leave encashment and cash payment towards entitled LTC
3)Condition – buy goods/services (with GST > 12%) worth 3 times of the fare and one time leave encashment
4) Estimated cost: For central govt. – Rs. 5,675 crore
5) For PSBs and PSUs – Rs. 1,900 crore
6)Tax concession will be allowed for state govt. and private sector too
7) Additional consumer demand Rs. 28,000 crore (Rs. 19,000 crore central govt. Rs. 9,000 crore by state govt. employees)  

2. Special festival advance scheme

1) Festival advance that was discontinued from 6th pay commission will be resurrected.
2) To be spent before March 31, 2021  
   Interest free advance of Rs. 10,000 in the form of prepaid RuPay card to be recoverable in maximum 10 instalments
3) Likely central govt. disbursement: Rs. 4,000 crore
4) If implemented by all State – Rs. 8,000 crore
5) If implemented by 50% states – Rs. 4,000 crore
6) No permanent increase in govt. expenditure. Advance will be recovered  

B. Capital expenditure: Special Assistance for states 
1) 50 year interest free loan to states for capital expenditure worth Rs. 12,000 crore. 
2) Over and above all other borrowings ceilings given to states 
3) Bullet repayment after 50 years no servicing till then 
4) Part 1: 2,500 crore - NE states (1,600 crore), Uttaarkhand (Rs. 450 crore) and HP (Rs. 450 crore) 
5) Part 2: Rs, 7,500 crore for other states in proportion to FC devolutions. Will be given in 50: 50. After utilisation of first 50% rest can be availed. 
6) Part 3: Rs. 2,000 crore for states which meet at least 3 out of 4 reforms announced during Aatmanirbhar Bharat fiscal deficit package 
7) Condition: To be used for new or ongoing capital projects by March 31, 2021 C. Capital expenditure for centre – Enhanced budget provision 
8) Over and above Rs. 4.13 lakh crore budgeted capital expenditure in FY21, additional budget provision of Rs. 25,000 crore will be granted for expenditure on Roads, Defence, Infrastructure, Water supply, Urban development, Defence infrastructure and Domestically produced capital equipment 
9) Allocations will be made in revised estimate discussions with Ministry of Finance


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