Finance minister Nirmala Sitharaman on Monday announced reintroduction of festival advance of Rs 10,000 for central government employees which will be given to them in a pre-paid Rupay Card.
The charges of issuance of card will be borne by the government. The money so received by employees cannot be withdrawn in cash. It has to be spent using digital means. This festival advance is available to all employees of central government, including the ones who are non-gazetted.
This will be an interest-free advance and need to be repaid in 10 instalments. State governments have the option of offering festival advance on the lines of festival advance offered by central governments. Festival advance of Rs 4,500 was available for employees in non-gazetted officers and below ranks as per sixth pay commission.
It was done away with when the seventh pay commission was introduced. Monday’s announcement offers festival advance only for the current financial year and the money so received needs to be spent before March 31, 2020.
Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment and 3 times ticket fare to purchase items that attract GST of at least 12 per cent.
The repayment will be in 10 installments, she said adding that Rs 4,000 crore is likely to be spent on this.
Sitharaman also announced a Rs 12,000 crore interest-free 50-year loan to states for spending on capital projects in a bid to boost economy. She said of the Rs 12,000 crore, Rs 1,600 crore will be given to north-eastern states and Rs 900 crore will be for Uttrakhand and Himachal Pradesh.
She said Rs 7,500 crore will be for the remaining states. Rs 2,000 crore will be given to states that fulfill pre-stated reforms. The loan will have to be spent entirely on new or ongoing capital projects, she said adding that states can settle bills of contractors and suppliers but all the amount has to be paid before March 31, 2021.
The loan is over and above borrowing ceilings of the states and the repayment will be one bullet payment after 50 years, she added. The Finance Minister also announced additional capital expenditure of Rs 25,000 crore by the central government. This will be in addition to Rs 4.13 lakh crore budgeted, she said, adding that the additional money will be for spending on roads, defence infrastructure, water supply and urban development.
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