Apex industry bodies hail FM’s measures to boost economy

New Delhi, Oct 13 (KNN) Major industry bodies have welcomed the mini economic booster announced by Finance Minister Nirmala Sitharaman on Monday without compromising the fiscal health of the Government.

The measures announced included Leave Travel Concession (LTC) Cash Voucher Scheme and Special Festival Advance Scheme for government employees to boost consumer spending.

The Central Government has also announced a special interest-free 50-year loan to the States of Rs. 12,000 crore Capital Expenditure.

While announcing measures to stimulate Capital Expenditure, the Finance minister said that money spent on infrastructure and asset creation has a multiplier effect on the economy. It not only improves current GDP but also future GDP.

The Govt announced Rs. 25,000 crore in addition to Rs. 4.13 lakh crore budgeted for roads, defence infra, water supply, urban development. She announced 12,000 crores in special interest-free 50-year loans to states. North East, Uttarakhand and Himachal Pradesh will get Rs. 2,500 crores and 7,500 crores for other states. Rs. 2,000 crore goes to states that meet centre's criteria.

Reacting to the economic measures, Dr Animesh Saxena President of Federation of Indian Micro and Small & Medium Enterprises (FISME) congratulated the Finance Minister for the initiative to boost spending without jeopardizing fiscal health.

Sangita Reddy, President, FICCI said, “Our government has delivered in a very innovative and fiscally prudent way to boost demand in the economy. These will energize growth over the remaining part of the year. The overall impact of these measures will be to the tune of Rs 1 lakh crore and this is sizable.”

Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry while appreciating the significant proposals said “calibrated and meaningful measures will have a multiplier effect on trade, industry and economy. These measures will stimulate consumer demand, boost capital expenditure and push the economic growth trajectory on the pre-COVID levels in the coming quarters.”

The Finance Minister further said that if demand goes up based on the stimulus measures announced, it will have an impact on those people who have been affected by COVID-19 and are desperately looking for demand to keep their business going.

The Finance Minister said that the government does not want to burden the common citizen with future inflation and also not put the Government debt on an unsustainable path.

The Government has decided to give cash payment in lieu of one LTC during 2018-21, which include; Full payment on Leave encashment, Payment of fare in 3 flat-rate slabs depending on the class of entitlement and Fare payment will be tax free.

An employee, opting for this scheme, will be required to buy goods/services worth 3 times the fare and 1 time the leave encashment before 31st March 2021. The employee is required to produce GST invoice to avail the benefit.

All Central Government employees can now get an interest-free advance of Rs. 10,000, to be spent by 31st March 2021 on the choice of the festival of the employee. The interest-free advance is recoverable from the employee in maximum of 10 instalments.

The employees will get pre-loaded RuPay Card of the advance value. Disbursal of advance through RuPay card ensures digital mode of payment, resulting in tax revenue and encouraging honest businesses.

The finance minister said that the Central Government is issuing a special interest-free 50-year loan to the States of Rs. 12,000 crore Capital Expenditure. It can be used for new or ongoing capital projects needing funds and / or settling contractors’/ suppliers’ bills on such projects. CAPEX to be spent by 31st March 2021

The Finance Minister said that an additional budget of Rs. 25,000 crore, in addition to Rs. 4.13 lakh crore given in Union Budget 2020, is being provided for Capital Expenditure on roads, defence, water supply, urban development and domestically produced capital equipment.