Union govt declares LTC cash voucher scheme & special festival advance scheme

Oct. 12: Finance Minister Nirmala Sitharaman on Monday announced a Leave Travel Concession (LTC) cash voucher scheme to increase consumer spending. Under this LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment, plus three times ticket fare, to buy items which attract a GST of 12 percent or more. Only digital transactions allowed. GST invoice needs to be produced by the employee.

Further, Finance Minister Nirmala Sitharaman has announced a one-time Rs 10,000 interest-free festival advance to all its officers and employees as part of plans to increase consumer spending to spur demand in the economy. The schemes are likely to lead to additional consumer demand of ₹ 36,000 crore by March 31, 2021, which will help those in need on account of the coronavirus pandemic. Sitharaman further projected that with even 50% states opting for this scheme, the government expects to infuse Rs 9,000 crore into the economy.

Usually Central government employees get leave travel concession in a block of four years–one each to a destination of choice and home town or two for home town. Under this, the air or rail fare is reimbursed as per pay scale/entitlement. Also, a leave encashment of ten days (pay+dearness allownace) is paid. However, employees will not be able to avail the LTC in the 2018-21 year block due to the ongoing Covid-19 pandemic. This is where the LTC will benefit government employees. An employee opting for this scheme will have to buy goods and services worth three times the fare and one time leave encashment, and do so before March 31, 2021.