FM announces Rs 73,000 stimulus to boost demand

To fight the slowdown following COVID-19, the Finance minister (FM) Nirmala Sitharaman has announced a slew of measures through a stimulus of Rs 73,000 crore to boost demand and consumer spending in the economy before the end of the current financial year.

The stimulus announced by the FM included LTC Cash Voucher Scheme and Special Festival Advance Scheme primarily to boost the GDP of the country. The stimulus measures are expected to generate a demand boost of more than Rs 1 lakh crore in the current staggering economy facing an apparent lack of enthusiasm.

Under the LTC Voucher scheme, the employees will be provided tax-free payment of LTC fare through the digital mode of transactions. The scheme has a four-year block and if the LTC is not being availed it will lapse hence the employees are encouraged to avail it.

Sitharaman said the scheme will generate additional consumer demand of Rs 28000 crore in the economy. The Festival Advance scheme is intended to encourage the employees to spend in the upcoming festive season. As part of this stimulus package, the government has also come up with an interest-free loan offer to the states with a capital expenditure of Rs 12000 crore. Capital expenditure scheme is expected to provide stimulus to road and urban development, water supply, and defense production, among others.

The FM also stated that all these measures are in addition to Rs 4.13 lakh crore with additional Rs. 25,000 crore capital expenditure announced in the Union Budget 2020.

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