Govt's steps will boost consumer spending, demand in economy: PM Modi2 min read . Updated: 12 Oct 2020, 09:33 PM IST
The Finance Minister announced a payment of cash in lieu of LTC and ₹10,000 festival advance to govt employees to stimulate consumer demand during the festival season and boost the economy
"Today's announcements by FM @nsitharaman Ji are timely moves which will boost consumer spending and sentiment as well as push capital expenditure. These steps will also boost demand in our economy," PM Modi tweeted.
What Nirmala Sitharaman announced
FM Sitharaman today announced measures of ₹73,000 crore to stimulate consumer spending in the economy in an effort to fight the slowdown due to coronavirus pandemic following lockdown.
Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur, Finance Secretary Dr Ajay Bhushan Pandey, Department of Financial Services Secretary Shri Debashish Panda and Department of Economic Affairs Secretary Shri Tarun Bajaj were also present during the announcement of stimulus package.
Sitharaman also announced a payment of cash in lieu of LTC and ₹10,000 festival advance to government employees as part of plans to increase consumer spending to spur demand in the economy.
Addressing a press conference, Sitharaman said that festival advance was discontinued from 6th Pay Commission for central government employees.
She also announced additional capital spending and ₹12,000 crore, 50-year interest-free loan to states to boost the economy that has been battered by the pandemic and the resulting lockdown.
But as a one-time measure, an interest-free advance will be given to all officers and employees of the central government, she said.
This ₹10,000 advance will come as a pre-paid rupay card, which can be availed and spent by March 31, 2021.
The repayment will be in 10 installments, she said adding that ₹4,000 crore is likely to be spent on this.
Enhanced budget provisions
Sitharaman said that additional budget of ₹25,000 crore, in addition to ₹4.13 lakh crore given in Union Budget 2020, is being provided for Capital Expenditure on roads, defence, water supply, urban development and domestically produced capital equipment.
To allow smooth conducting of Government business, allocations will be made in forthcoming Revised Estimate discussions of Ministry of Finance with concerned ministries.
India Inc welcomes govt stimulus
India Inc on Monday cheered Finance Minister Nirmala Sitharaman's announcement of payment of cash in lieu of LTC and ₹10,000 festival advance to government employees, saying these measures will boost demand while instilling a "feel good" factor in the people and energize growth.
CII Director General Chandrajit Banerjee said the finance minister's announcement on boosting demand through a two-pronged strategy will provide a huge impetus to spending, both by consumers and governments, which in turn will accelerate economic activity.
"The measures will also be a significant feel good factor for the people who have been going though some tough and challenging times due to the pandemic," he added.