Finance Minister announces Festival Advance scheme, LTC Cash Voucher Scheme
On October 12, 2020, the Finance Minister Nirmala Sitaraman Announced the Special Festival Advance Scheme and LTC Cash Voucher Scheme. The schemes were launched to boost the demand in the country.
In all, the GoI has allocated Rs 73,000 crores to simulate consumer spending in order to increase demand in the country.
Special Festival Advance Scheme
Under the scheme, the central government employees will get pre-loaded Rupay cards. They can be withdrawn at ATMs. These advances shall be repaid by the employees in 10 instalments. The scheme is to provide one-time festive advance of Rs 10,000 to all the government employees. This will boost the consumer demand to Rs 8,000.
LTC Cash Voucher Scheme
The Government of India is to provide tax concessions for LTC tickets available for state governments and private sectors. Under the scheme, the government employees shall opt to receive encashment.
Both the LTC cash voucher scheme and the festive advance scheme have been designed to boost the demand in the country.
The Finance Minister also announced the following measures
- The states are to get 50-year interest free loans. The North-East States are to get loans of Rs 1,600 crores. The states of Uttarakhand and Himachal Pradesh will get Rs 900 crores of interest free loans. The other states will get interest free loans of Rs 7,500 crores.
- The Capital expenditure budget of the centre has been increased by Rs 25,000 crores from Rs 4.13 lakh crores. This has been done for expenditure on road, urban development, water supply and defence infrastructure. This is in addition to 4.13 lakh cores allocated in Union Budget, 2020.
What is Capital Expenditure?
It is the money spent on acquisition of land, machinery, buildings, equipment. The expenditure of Government is divided into two parts as follows
- Creation of assets
- Operational expenses and liabilities. These do not create assets.
Why is capital expenditure important?
Capital Expenditure means development of highways, dams, airports, railway lines, etc. It means more investment by GoI towards creation of infrastructure.
Category: Economy & Banking Current Affairs