Travel Payout, Festival Advance For Government Employees Till March-Nirmala Sitharaman


Finance Minister Nirmala Sitharaman on Monday announced two special schemes for government staff in a bid to boost consumer demand: a Leave Travel Concession-related cash voucher and a festival advance. The schemes are likely to lead to additional consumer demand of ₹ 36,000 crore by March 31, 2021, which will help those in need on account of the coronavirus pandemic. Employees of central and state governments as well as public sector companies will be able to use these schemes to spend money on festivals of their choice till March 31.

  1. “Indications are that savings of government and organised sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate,” the Finance Minister said.
  2. Under the LTC cash voucher scheme, government employees can opt to receive cash amounting to leave encashment and three times the ticket fare to purchase items that attract GST of at least 12 per cent.
  3. This amount can be spend only on buying non-food GST-rated items and the purchases will have to be made in digital mode from GST-registered outlets, the Finance Minister said.
  4. The money was originally meant to be utilised by government employees for leaves that got wasted due to the coronavirus pandemic-related restrictions.
  5. Since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021, Ms Sitharaman said.
  6. These benefits will cost the government around ₹ 5,675 crore. The government has also allowed public sector companies such as state-run banks to avail this facility. For them, the cost will be ₹ 1,900 crore.
  7. The Finance Minister also announced the reintroduction of a festival advance for central government employees through the Special Festival Advance Scheme, till March 31. This advance was abolished as per 7th Pay Commission recommendations.
  8. As a one-time measure, an interest-free advance will be given to all officers and employees of the central government, the Finance Minister said.
  9. Under this scheme, an interest-free advance of ₹ 10,000 will be given to government employees through a pre-loaded RuPay debit card. This money will be recoverable in 10 instalments, till March 31. The expenditure on this is estimated at ₹ 4,000 crore, according to the government.
  10. The announcements come at a time when the country’s GDP or gross domestic product contracted a record 23.9 per cent in the April-June period as the quarter fully captured the damage caused by the coronavirus pandemic-related restrictions. The RBI has said the GDP is likely to shrink 9.5 per cent in the current financial year.