You can be on Entrepreneur’s cover!

The Govt Wants You to Spend; Announces Festival Advance to Boost Consumer Spending To encourage consumer spending, Sitharaman announced two schemes- a leave travel concession (LTC) cash voucher and special festive advance-mainly aimed at benefitting central government employees

By Shipra Singh

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Centre's new economic revival package announced by finance minister Nirmala Sitharaman on Monday has sent the message loud and clear—spend to boost the economic growth crippled by the Covid-19 pandemic.

With about 21 million salaried jobs lost, as per Centre for Monitoring Indian Economy (CMIE), and self-employed professionals cash-dry, consumers are still shying away from spending on non-essentials. Even as lockdown restrictions lift and we approach the festive season, data shows consumer spending continues to remain tepid due to the economic uncertainty created by the spread of Covid-19.

The government's fresh package consists of schemes that aim to stimulate consumer spending and in turn boost the country's GDP.

FM Sitharaman noted that the schemes are designed in a way that they stimulate demand by advancing some of the expenditures while others are directly linked to an increase in the GDP.

To encourage consumer spending, Sitharaman announced two schemes— a leave travel concession (LTC) cash voucher and special festive advance—mainly aimed at benefitting central government employees.

The LTC cash voucher enables government employees who are eligible to claim LTC to avail leave encashment in place of travel expenses, to buy items that attract 12 per cent or more GST.

"If central government employees opt for it, this will cost around INR 5,675 crore. The employees of PSBs and PSUs allowed to avail this facility, and for PSBs and PSUs the cost will be INR 1,900 crores. The demand infusion in the economy by the central government and PSUs will be approx INR 19,000 crore," said FM Sitharaman.

Under the special festival advance scheme, government employees can avail of an interest free advance of INR 10,000. However, the advance will not be handed out as cash but will be issued as a prepaid RuPay card that can only be used to make purchases.

This advance is available till March 2021 and has to be paid back in up to 10 installments.

FM Sitharaman said INR 4,000 crore is expected to be disbursed under this scheme. "If given by all state governments, another INR 8,000 crores is expected to be disbursed. Employees can spend this on any festival," she added.

"We estimate that the measures announced today, for boosting consumer spending and capital expenditure will boost demand by INR 73,000 crore, to be spent by March 31, 2021," she said.

Shipra Singh

Entrepreneur Staff

Freelance Journalist

Starting a Business

The Entrepreneur Who Made 'Avengers,' 'Game of Thrones' and 'Stranger Things' Sound as Awesome as They Look

Orfeas Boteas, the founder and CEO of Krotos, discusses his game-changing AI-powered sound design platform.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

News and Trends

Nikhil Kamath's WTFund Invites Applications from April 15 from Young Entrepreneurs

The new sector-agnostic fund will offer a package including a non-dilutive grant of INR 20 lakh and will enable founders to retain full equity in their ventures.

News and Trends

As First Close, Inviga Healthcare Fund Secures USD 20 Mn

The Bengaluru-based fund aims to support healthcare and pharmaceutical/life science enterprises throughout the entire value chain.

Starting a Business

Watch Now: Tapping into Your Unconventional Thinking and Using It to Create a Million-Dollar Business

This husband-and-wife power duo is the founder of the fastest-growing direct-to-consumer kid's food brand in the U.S. Here's their advice to our subscribers.

News and Trends

ESG Consulting Startup Uniqus Consultech raises USD 10 Mn in Series B from Nexus Ventures and Sorin Investments

The Mumbai-based platform will use the fresh funds for scaling up existing solutions, the launch of adjacent service offerings and geographical markets, and continued investments in technology.