Nirmala Sitharaman announces new LTC cash voucher scheme to boost consumer spending

Finance Minister Nirmala Sitharaman on Monday morning launched a new LTC cash voucher scheme with an aim to boost consumer spending across categories. The FM also announced Special Festival Advance Scheme while announcing new relief measures on the economic front. Both the schemes come as part of Consumer spending related proposals from the finance minister.  

"Indications are those 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,” said Finance Minister. 

The proposals to stimulate demand are designed to stimulate demand in a fiscally prudent way. Some of them involve advancing of expenditure, with offsetting changes later, others are directly linked to increasing GDP, said Finance Minister Nirmala Sitharaman. 

Leave Travel Concession (LTC) Cash Voucher Scheme Details 

Central government employees get LTC in a block of 4 years (one to anywhere in India and one hometown or two to hometown). Air or Rail Fare, as per scale/entitlement, is reimbursed and in addition, Leave encashment of 10 days (pay + DA) is paid. Due to COVID-19, employee are not in position to avail LTC in the current block of 2018-19.  

The Finance Minister said that the government will give cash to central government employees in lieu of LTC ticket fare component for buying items attracting 12% or more GST. “Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment plus 3 times ticket fare, to buy items which attract GST of 12% or more. Only digital transactions allowed, GST invoice to be produced,” FM Nirmala Sitharaman said. 

This cash paid to the employees will be tax free, the FM confirmed.