LTC Cash Voucher Scheme: How Central Government employees benefit
New Delhi, Oct 12: The government on Monday announced the LTC Cash Voucher scheme and the Special Festival Advance Transfer Scheme.
Under the LTC cash voucher scheme, the government employees can opt to receive cash amounting to leave encashment plus three times ticket fare to buy items which attract of GST of 12 per cent of more, Union Finance Minister, Nirmala Sitharaman said. Only digital transactions will be allowed and the GST invoice must be produced, Sitharaman also said.
Needs of the poor and weaker sections have been addressed in the Aatma Nirbhar Bharat package, supply situation has improved, but consumer demand needs to be given a boost, Sitharaman also said.
Indications are that savings of the government and organised sector employees have increased. We want to incentivise such people to boost demand for the benefit of the less fortunate, the finance minister also said.
Tax concessions for LTC tickets will be available for state government and private sector too. If they choose to give such facility, these employees too can benefit, Sitharaman also said.
For the Central government, the estimated cost of the LTC cash voucher scheme is Rs 5,675 crore and for PSBs and PSUs, it would be 1,900 crore.
On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of Rs 28,000 crore, Nirmala Sithararman also said.
An employee opting for this scheme will be required to buy goods and services worth three times the fare and one time the leave encasement. In order to avail the scheme, the money must be spent on goods attracting 12 per cent GST or more from a registered vendor. The transaction has to be made through a digital mode only.
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.