What measures did Finance Minister announce to Boost the Demand in country?
The Finance Minister Nirmala Sitaraman had announced measures to boost the demand in the country on October 12, 2020. The measures include the schemes namely, the Special Festival Advance Scheme and LTC Cash Voucher Scheme. For booting the demand, Government of India has allocated Rs 73,000 crores. It will simulate the consumer spending and thus boost the demand in the country.
Special Festival Advance Scheme
The scheme has been announced to provide one-time festive advances of Rs 10,000 to the central government employee. The central government employees will be provided with the pre-loaded Rupay cards under the scheme. The money from the Rupay Card can be withdrawn at ATMs. The employees need to repay the money in 10 instalments. The scheme would boost the consumer demand to Rs 8,000.
LTC Cash Voucher Scheme
Under this scheme, Government of India will provide tax concessions for LTC tickets that are available for state governments and private sectors. The government employees would have to opt for scheme in order to receive the encashment.
Apart from the two schemes, the Finance Minister also announced the under stated measures to boost the demand:
- The states will be provided 50-year interest free loans. The North-East States will be provided a loan of Rs 1,600 crores while the states of Uttarakhand and Himachal Pradesh will be provided Rs 900 crores loans. Rest of the states will be provided loans of Rs 7,500 crores.
- Capital expenditure budget of the centre has also been increased by Rs 25,000 crores. Earlier it was Rs 4.13 lakh crores as announced in budget 2020. This was done for expenditure on road, water supply, urban development and defence infrastructure.
The money spent on acquisition of land, machinery, buildings and equipment are called as Capital Expenditure. Capital Expenditure leads to the development of highways, dams, airports, railway lines, etc by boosting government investments towards the project.