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Sitharaman Presser Highlights: Govt announces measures worth Rs 1 lakh cr to boost consumption, capex

Centre offers interest-free 50-year loans to States for capital expenditure for Rs 12,000 crores, consisting of three components, says Finance Minister Nirmala Sitharaman

twitter-logoBusinessToday.In | October 12, 2020 | Updated 14:33 IST
Sitharaman Presser Highlights: Govt announces measures worth Rs 1 lakh cr to boost consumption, capex
Finance Minister Nirmala Sitharaman to hold press meet at 12:30 PM

FM Nirmala Sitharaman on Monday announced economic measures to boost consumer spending and capital expenditure, which the Centre expect will boost the demand by Rs 73,000 crore by March 31, 2021. Sitharaman said today's consumer spending measures relate to two components - LTC Cash Voucher scheme and Special Festival Advance Scheme. Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment plus 3 times ticket fare, to buy items which attract GST of 12% or more. Only digital transactions allowed, GST invoice to be produced. Under the Special Festival Advance Scheme, all central government employees can now get an interest-free advance of Rs 10,000, in the form of a prepaid RuPay Card, to be spent by March 31, 2021.The Centre also offered interest-free 50-year loans to States for capital expenditure for Rs 12,000 crores, consisting of three components.

Check out Live Updates on FM Nirmala Sitharaman's press conference on BusinessToday.In Live blog

1.26 PM: The FM says additional budget of Rs 25,000 crore (in addition to Rs 4.13 lakh crore given in Budget 2020) is being provided for capital expenditure on roads, defence, water supply, urban development and domestically produced capital equipment.

1.23 PM: "Under Part 3 of Rs 12,000 crore interest-free loans to states, Rs 2,000 crore will be given to those states which fulfill at least 3 out of 4 reforms spelled out in Aatma Nirbhar Bharat package. This is over and above other borrowing ceilings," says FM.

1.19 PM: Both Part 1 and Part 2 of interest-free loans given to states are to be spent by March 31, 2021. 50% will be given initially, remaining upon utilization of first 50%: Sitharaman.

1.17 PM: The Centre offers interest-free 50-year loans to States for capital expenditure for Rs 12,000 crores, consisting of three components, says Finance Minister Nirmala Sitharaman

1.15 PM: Sitharaman says the capital expenditure - money spent on infrastructure and asset creation - has a multiplier effect on the economy, it not only improves current GDP but also future GDP, we want to give a new thrust to capital expenditure of both states and Centre. 

1.10 PM: Sitharaman says the one-time disbursement of Special Festival Advance Scheme is expected to amount to Rs 4,000 crore; if given by all state governments, another Rs. 8,000 crore is expected to be disbursed.

1.08 PM: "Special Festival Advance Scheme for non-gazetted employees is being revived as a one-time measure, for gazetted employees too. All central govt. employees can now get interest-free advance of Rs. 10,000, in the form of a prepaid RuPay Card, to be spent by March 31, 2021," says FM Sitharaman.

1.07 PM: The government announces Rs 10,000 one-time festival advance scheme for all govt employees.

12.59 PM: Estimated cost of LTC Cash Voucher Scheme

  • For Central govt: Rs 5,675 crore
  • For PSBs & PSUs: Rs 1,900 crore

Tax concessions for LTC tickets available for state govt. & private sector too, if they choose to give such facility, these employees too can benefit.

12.56 PM: The FM says "indications are that savings of govt and organised sector employees have increased, we want to incentivise such people to boost demand for the benefit of the less fortunate."

12.54 PM: What is LTC Cash Voucher Scheme?

Under LTC Cash Voucher Scheme, govt. employees can opt to receive cash amounting to leave encashment + 3 times ticket fare, to buy something - items which attract GST of 12% or more. Only digital transactions allowed, GST Invoice to be produced.

12.52 PM: Latest pics from press conference by Union Finance Minister on economic issues.

12.50 PM: Finance Minister Nirmala Sitharaman says the government employees can choose to buy goods or services worth three times the fare and one time the leave encashment. 

12.49 PM: The proposals being presented are designed in a way that they can stimulate demand by front-loading/advancing some of the expenditure with some offsetting changes. Others are directly linked to an increase in the GDP: FM Sitharaman

12.48 PM: Watch Nirmala Sitharaman's presser here:

12.44 PM: The pandemic has adversely affected the economy. The needs of the poor and weaker sections addressed in various announcements by the govt. Supply constraints have somewhat eased but consumer demand still needs to be given a boost: FM Nirmala Sitharaman

12.43 PM: FM Sitharaman says supply constraints have eased but slow consumer demand is a concern.

Also Read: GST Council meeting: Centre vs States again on compensation issue

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