In good news for lakhs of central govt employees, the Union Cabinet on Wednesday approved productivity and non-productivity linked bonuses for the financial year 2019-2020. The financial assistance will help employees utilise this bonus money ahead of Diwali. As per the government, the money will directly be credited in their bank accounts.
Over 30 lakh non-gazetted employees will benefit from the announcement. Total financial implication the decision will be Rs 3,737 crore, Union Minister Prakash Javadekar said on Wednesday.
He added the bonus will be given in a single instalment, through direct benefit transfer before Vijayadashami. There's little clarity as to how much money will be credited in each bank account.
Today's announcement marks the government's resolve to boost spending as coronavirus dampens demand in the country. On October 12, as part of the second round of stimulus, the government had announced measures that by its estimate would give a demand boost of Rs 1 lakh crore.
To boost consumer spending, the government announced a special tax exemption for Central government employees, who get Leave Travel Concessions (LTC) in a block of 4 years leave encashment of 10 days.
Finance Minister Nirmala Sitharaman said employees are not in a position to avail of LTC in the current block of 2018-21 due to COVID-19, so the government in place of one LTC during 2018-21 was offering full payment on leave encashment and payment of fares (for air and rail travel).
She also announced a special one-time festival advance of Rs 10,000 to all central government employees in the form of a prepaid Rupay card. To boost capital expenditure by the state governments, the government also announced Rs 12,000 crore special interest-free 50-year loans scheme to states.
The Centre has also decided to spend an additional Rs 25,000 crore on capital expenditure over and above the budgeted amount of Rs 4.13 lakh crore allocated for it.
All these measures are aimed at boosting consumer demand and giving a push to capital expenditure.
Meanwhile, the Cabinet also approved the adaptation of the Jammu & Kashmir Panchayati Raj Act, 1989, on Wednesday. Javadekar said this decision will help establish all three tiers of grass-root level democracy in the region.