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Centre to give Rs 10,000 special festival advance to all govt employees; LTC cash voucher scheme announced
12-October-2020

In a bid to stimulate demand in the economy, the government on Monday announced giving out cash vouchers to central government employees this year in lieu of leave travel concession (LTC) fare which could be spent only on buying non-food GST-rated items. Finance minister said that the government will give Rs 10,000 special festival advance all its employees as one-time measure to stimulate demand in the economy.

Finance Minister Nirmala Sitharaman said the employees could buy items that attract 12 per cent or more goods and services tax (GST). These purchases will have to be made in digital mode from GST-registered outlets.

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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.

On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of ? 28,000 crore: Union Finance Minister @nsitharaman pic.twitter.com/PDsvDewcie

— Prasar Bharati News Services (@PBNS_India) October 12, 2020

Only digital transactions will be allowed in this and GST invoice will be produced, Sitharaman said.

Leave Travel Concession (LTC) is available to government employees and organized sector employees. Every four years, central government employees get LTC to any destination to their choice plus one to their hometown.
Since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021, she said.

Central government payout on cash-in-lieu-for-LTC will be Rs 5,675 crore, and another Rs 1,900 crore will be payout by central PSUs and public sector banks, Sitharaman said.

The demand infusion because of this would be Rs 19,000 crore, and another Rs 9,000 crore if half of the states follow this guideline, she added.