FM Nirmala Sitharaman issues Rs 12,000 crore loan to states for 50 years interest free

Photo Credits: Hindustan Times

Finance Minister Nirmala Sitharaman addressed the media houses at a press conference on the proposals to life up the economy at National Media Centre in New Delhi on Monday.

Sitharaman told the reporters regarding the plans of the government to provide incentives to the people for increasing the demands for the unfortunate, thereby directing to the point that savings to the government sector have increased.

The finance minister told about the new proposal focusing on consumer spending, bifurcated into two parts: Leave Travel Concession (LTC) and special festive advance scheme.

The LTC will facilitate travel for the central government staff in a block of four years – one would all over India and one hometown or two. The travel charges are compensated and the employees would also receive paid leave for 10 days.

To which, Sithraman stated, “Since the employees are not able to travel anywhere due to Covid-19, they can spend the money in buying something of their choice. But the money has to be spent on items which attract 12% or more GST.”

The expenditure needs to be done by digital mode, she said.

She further stated that the government will spend Rs. 5675 crore on this and that employees of Public Sector Undertaking (PSUs) and Public Sector Banks (PSBs) can also avail the scheme.

Regarding the special festive advance scheme, Sitharaman clarified that the government will give Rs 10,00 special festival advance as prepaid RuPay cards to all its employees as one-time measure to stimulate demand.

In the other half of her address in the press conference, the finance minister specified that the capital expenditure multiplies the economy. Also, the government has taken the step to issue an interest devoid loan for a period of 50 years to the states worth Rs. 12,000 crore.

The government thereby anticipates that the measures declared in the press conference would enhance the demand by Rs. 73,000 crore, which to be spend by March 2021.