India’s fight against the pandemic was more difficult as the country was already carrying a burden of a prolonged slowdown.Nirmala Sitharaman Highlights: Finance Minister Nirmala Sitharaman today announced that government employees can avail cash voucher for LTC if they can’t travel due to pandemic. Employees can use the money to buy items attracting 12 per cent or more GST, increasing consumer demand. However, employees can spend an LTC cash voucher only through digital mode and at places registered under GST before 31 March 2021. FM Sitharaman is addressing media on economic issues, ahead of the GST Council meeting scheduled later this evening. The government also announced that the north-east states will get 50-year interest-free loans of Rs 1,600 crore and Himachal Pradesh and Uttarakhand will get Rs 900 crore. The amount has to be spent by 31 march 2021. Other states will also get Rs 7,500 crore loans in proportion to their share in Finance Commission evolution. FM Sitharaman added that half of the amount will be disbursed initially and the second part will be disbursed once the previous amount is utilised. Further, the government increased the centre’s capital expenditure budget by Rs 25,000 crore from Rs 4.13 lakh crore for expenditure on the road, water supply, urban development, and defence infrastructure including manufacturing domestic equipment
Highlights
The Government’s proposals to enhance capital expenditure in the country is highly appreciable as this will have a multiplier effect on the growth of trade, industry and economy; creating employment opportunities for the workforce: Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.
Finance Minister Nirmala Sitharman on Monday announced a Rs 12,000 crore interest-free 50-year loan to states for spending on capital projects in a bid to boost economy. Addressing a press conference, she said, out of the Rs 12,000 crore, Rs 1,600 crore will be given to north-eastern states and Rs 900 crore will be for Uttrakhand and Himachal Pradesh. She said Rs 7,500 crore will be for the remaining states. Rs 2,000 crore will be given to states that fulfill pre-stated reforms. Read full story here
Agriculture Bills empower the farmer with the power of choice, competitive price, and bigger market opportunities - Anurag Singh Thakur, MoS, Ministry of Finance.
The festival advance with only a single condition of digital spending which is implemented through a rupay prepaid card, without any other frills, is definitely a welcome one and is expected to be well received by the salaried class. However, the estimate of the increase in demand of around Rs 36000 crores as against estimated spending of Rs 11500 crores by the central government seems to be overstated. In the current scenario, expecting the private sector and the state governments to spend a similar amount cannot be justified. Divakar Vijayasarathy, Founder and Managing Partner, DVS Advisors LLP
We really appreciate FM’s Decision to give vouchers, they will lead to Consumerism. Demand for consumer electronics will increase with this stimulus due to limited choice to spend on travel and other entertainment. So mostly customers will spend on durables especially screens and appliances: Avneet Singh Marwah, Director, and CEO, Super Plastronics Pvt Ltd, a Kodak brand licensee.
It is good to hear that the government has turned its attention towards the demand side. However, the announcements have come with a "conditions apply" tag. The thought process behind the LTC cash vouchers is to spend the money which ought to have been spent by the Govt or PSBs in the absence of the pandemic. The conditions of 3 times spending of LTC & 1 time of leave encashment on products and services of GST slab rate of 12% dampens the spirit. The condition of the 3 times spending of the LTC would only push the middle class salaried population to postpone the availing LTC to subsequent years in this block. -- Divakar Vijayasarathy, Founder and Managing Partner, DVS Advisors LLP
Government employees can opt for cash amount worth three times of ticket fare under LTC cash voucher: Govt
Supreme Court has issued notice to Centre. It will hear pleas against new farm laws after 6 weeks. SC has asked Attorney General to assist court on pleas contesting new farm laws.
Estimates are made on a very conservative basis. Only 1/4th of employees will be claiming the benefit. We will be very happy if more employees claim the benefit, says Economic Affairs Secretary
We would request private sector to consider similar measures to help another Rs 28,000 cr demand, says FM Sitharaman
Have assumed that only 50 per cent of the states will give same benefits on LTC scheme. Estimates also assume that private-sector impact (on LTC Scheme) is same as Central+State govt impact: Economic Affairs Secretary
For PSU banks, CPSE employees, today's scheme will cost Rs 1,900 crore and the same for state government employees will be Rs 9,000 crore.
Boosting consumer spending and raising government expenditure are the pillars of any growth revival. Government has taken commendable steps towards increasing demand in the economy. While consumer spending will get some push, a significant impact can only be expected when outlays announced are actually spent and a measurable increase in government spending on infrastructure and related projects takes place. Some revival push can definitely be expected from these measures: Archit Gupta, Founder and CEO - ClearTax
The seventh pay commission does not include provision for festive advance but the government is rolling out a one-time measure of festive advance. It will not be a burden on the Centre as it will be recovered in 10 installments: FM Sitharaman
Central government employees are already heading towards the end of the 4-year block of LTC. This will encourage the employee to avail LTC cash voucher scheme: FM Sitharaman
The government's estimates on a rise in consumer demand is on a conservative side: Govt
Since LTC benefit is available to private-sector employees as well, it is important for companies to look at their policies around Leave Travel concessions and amend them in line with the government's announcement to extend the tax benefits to its employees: Saraswathi Kasturirangan, Partner, Deloitte India.
Today's solution must not cause tomorrow's problems. Stimulus measures to not burden common citizens: FM Sitharman
Measures to stimulate demand must not burden common citizens. Today's solution should not create tomorrow's problem: Govt
The total boost to the demand is estimated at around Rs 73,000 crore after today's announcement: FM Sitharaman
The government increased the centre's capital expenditure budget by Rs 25,000 crore from Rs 4.13 lakh crore for expenditure on road, water supply, urban development, and defence infrastructure including manufacturing domestic equipment: FM Sitharaman
Half of the amount will be disbursed initially and the second part will be disbursed once the previous amount is utilised: FM Sitharaman
Rs 7,500 crore for other states will get interest-free loans in proportion to share in Finance Commission evolution: FM Sitharaman
North-east states to get 50-year interest free loans of Rs 1,600 crore and Himachal Pradesh and Uttarakhand will get Rs 900 crroe. The amount has to be spent by 31 march 2021: FM Sitharaman
Capital expenditure on infrastructure building has a greater multiplier effect on the economy and that's why it is one of the most favourable move: FM Sitharaman
The consumer demand is likely to get a boost of Rs 8,000 crore due to festive advance to government employees.
Employees will get interest-free festival advance as a prepaid credit in RuPay cards, not in cash that can be withdrawn from ATMs: FM Sitharaman.
The central government can get festival advance to use till 31 March 2021. Employees will have to repay in 10 installments.
Government announces a one-time festive advance of Rs 10,000 for all central government employees, irrespective of designation.
Consumer demand of nearly Rs 28,000 crore will be generated from the LTC cash voucher scheme: FM Sitharman
The consumer demand will get a boost of Rs 5,675 crore by central government employees availing the LTC cash voucher scheme and the same for PSUs will be Rs 1,900 crore.
Employees can spend LTC cash voucher only through digital mode and at places registered under GST before 31 March 2021: FM Sitharaman
Employees can avail cash voucher for LTC if they can't travel due to pandemic. Employees can use the money to buy something of items attracting 12 per cent or more GST, increasing consumer demand: FM Sitharaman
LTC cash voucher scheme and special festive advance scheme on today's cards: FM Sitharaman
FM Sitharaman to make announcements for poor, weaker sections today.
FM starts speaking on economic issues, aims at boosting consumer demand.
FM Sitharaman is likely to announce some measures ahead of the festive season to boost demand, and is expected to present a report card on the state of the economy.
Finance Minister Nirmala Sitharaman to address press conference soon.
A Special Liquidity Scheme was announced under which Rs 30,000 crore of investment were to be made by the government in both primary and secondary market transactions in investment-grade debt paper of Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), and Micro Finance Institutions (MFIs). The central government assured to provide 100% guarantee for these securities.
The government announced collateral-free automatic loans of up to Rs 3lakh crore. through which MSMEs can borrow up to 20% of their entire outstanding credit as on February 29, 2020 from banks and Non-Banking Financial Companies (NBFCs). Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover were eligible for such loans and could avail the scheme till October 31, 2020. Interest on the loan was to be capped and 100% credit guarantee on principal and interest were to be given to banks and NBFCs.