Special Festival Advance Scheme for Central Government Employees
Under the special festival advance scheme, Ms. Sitharaman said, an interest free festival advance of Rs. 10,000/- will be made available to all government employees.
The government has announced a one-time interest-free festival of Rs 10,000 for all its officers and employees as part of a plan to increase consumer spending to boost demand in the economy.
1) Measures to Stimulate Consumer Spending
Proposals to stimulate consumer spending has two components
- LTC Cash Voucher Scheme
Special Festival Advance Scheme
LTC Cash Voucher Scheme
Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment + 3 times ticket fare, to buy something of their choice. The items bought should be those attracting GST of 12% or more. Only digital transactions are allowed, GST Invoice to be produced.
The biggest incentive for employees to avail the LTC Cash Voucher Scheme is that in a four-year block ending in 2021, the LTC not availed will lapse, instead, this will encourage employees to avail of this facility to buy goods which can help their families.
Estimated cost of LTC Cash Voucher Scheme: For Central govt. : ₹ 5,675 crore; for PSBs & PSUs: ₹ 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
Indications are that savings of govt. and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate. On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of ₹ 28,000 crore.
– Union Finance Minister Smt. Nirmala Sitharaman
Special Festival Advance Scheme
Special Festival Advance Scheme which was meant for non-gazetted government 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.
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. Employees can spend this on any festival.
READ ALSO: Grant of Festival Advance to Central Government Employees – Finmin Order dated 12-10-2020
LTC voucher and festival advance scheme for CG Employees
Ms. Sitharaman informed that the new proposals aim at giving a thrust of around 36 thousand crore rupees to the consumer demands by the Leave Travel Concession LTC Voucher and Festival advance scheme.
- As a one-time measure, an interest-free advance will be given to all officers and employees of the central government
- This Rs. 10,000 advance will come as a pre-paid rupay card, which can be availed and spent by March 31, 2021
- Interest-free advance of Rs. 10,000/- to be recoverable in maximum 10 instalments.
Source: PIB