The Minister has announced a slew of measures to spur spending and stimulate economic demand.
Finance Minister Nirmala Sitharaman unveiled new proposals to stimulate demand in the economy in the wake of the coronavirus pandemic.
Addressing a press conference, Ms. Sitharaman said that she has broadly classified the proposals into two different compartments — consumer spending and capital expenditure.
She said: “There is no gain saying that the pandemic has affected the economy adversely. The needs of the weaker and poor sections have been addressed somewhat in the various packages announced so far. Supply constraints have somewhat eased but consumer demand still needs to be given a bit of a boost. The proposals presented today are defined in such a way — by frontloading some expenditure or advancing some expenditure with some offsetting charges later. The others are directly linked to an increase in the GDP.”
Consumer spending proposals
The Finance Minister said that the consumer spending proposals include a LTC cash vouchers scheme and a special festival advance scheme. The LTC Cash Vouchers scheme is mainly targetted to employees in the government and other organised sectors.
The Minister described the scheme as follows: “Government and many organised sector employees have their jobs and salaries protected and some initial indications suggest savings have increased as many couldn’t spend their usual expenditure during the lockdown.”
She continued: “Central government employees, in a block of four years — between 2017-18 and 2020-21 — employees would have normally availed of one leave travel concession for any destination of their choice plus one visit to their hometown. If they didn’t choose leave travel to one destination of their choice, they would usually go twice to their native village. This would mean air or rail fare as per their pay scale is reimbursed to them.