• 9964432222
  • Mail Us
  • Appointment
  • Locate Us
  • Chat Now
  • Courses
  • Login
  • Register
Manifest IAS
JournalsOfIndia
Manifest Learning Academy
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
JournalsOfIndia
No Result
View All Result
Home Economy

Stimulus package to boost demand post Covid

October 29, 2020
in Economy
Reading Time: 3 mins read
0
Stimulus package to boost demand post Covid
55
VIEWS
Share on WhatsAppShare on TelegramShare on Facebook
image_pdfMake PDF

Covid has put a damper on economic growth, employment and the dream of a 5 trillion economy. Moreover, the importance of rescue and relief is felt through the hardships faced by the population. Therefore, the government is taking various steps to boost growth.

In news: Indian government has announced a set of measures in the hope of boosting consumer spending and capital expenditure.
Placing it in syllabus: Indian economy

Static dimensions

  1. Background

Current dimensions

  1. Boosting spending
  2. How are states helped?

Content:

Boosting spending:

  • Finance Minister Nirmala Sitharaman recently announced measures in two buckets – schemes intended to boost spending by central government employees, and those intended to push states’ capital expenditure.
  • The total estimated boost to the economy may add up to Rs 1 lakh crore.

The first is the ‘Leave Travel Concession Cash Voucher Scheme’.

  • It is applicable to government employees.
  • Cash payment to employees in lieu of one LTC during 2018-21.
  • Full payment on leave encashment and payment of fare in three-flat rate slabs will be made.
  • 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 March 31, 2021.
  • Money is to be spent on items where 12% or more GST is imposed.
  • Spending has to be done via digital means and only at GST registered businesses.
  • Spending should happen before March 31, 2021.

The same tax concession for LTC tickets is available to state governments and the private sector too. It is estimated that the scheme could generate additional consumer demand worth Rs 28,000 crore overall.

The second scheme introduced is the Special Festival Advance Scheme (was a part of earlier pay commissions but was not included in the Seventh Pay Commission).

  • It is a one-time measure for all central government employees.
  • State governments can consider implementing the same.
  • Rs 10,000 advance will be available for all central government employees to be repaid in 10 instalments.
  • Advance will be available till March 31 2021.
  • To be given as a prepaid rupay card.
  • Cannot be drawn as cash from an ATM but can be spent anywhere.
  • It will generate a consumer demand of an estimated Rs 8,000 crore if given by all state governments.

How are states helped?

  • The government has tried to front load capital expenditure by states.
  • The first such scheme introduces special assistance to states as follows:
  • Rs 12,000 crore in special interest free 50-year loans will be provided to states –

Rs 2,500 crore of this will go to North East, Uttarakhand and Himachal Pradesh.

Rs 7,500 crore to go to other states in proportion to Finance Commission devolution formula.

Rs 2,000 crore goes to states which meet some of the criteria set out by the central government earlier.

  • 50% of the amount to be given initially, and the balance amount after the first instalment.
  • Money has to be spent before March 31, 2021.
  • It has to be used to settle supplier bills.
  • This money will be over and above the borrowing limits set for states.

An additional budget of Rs 25,000 crore will be provided for capital expenditure for roads, defence infrastructure, water supply, urban development.

Background:

  • After unlocking the COVID lockdown, several initiatives and packages have been announced to boost the economy.
  • The government has stuck to a revised borrowing target of 12 trillion rupees in the current fiscal year.
  • The RBI has left key policy rates unchanged.
  • It has retained an accommodative monetary stance to support an economy that is projected to contract by almost 10% in the current fiscal year.
Mould your thought:

  1. What are the set of measures announced to boost consumer spending and capital expenditure post COVID?

Approach to the answer:

  • Write background
  • Explain the two schemes proposed
  • Write how states have been helped
  • Conclusion
image_pdfMake PDF
Source: ET
Tags: GS-3Mains

Related Posts

IREDA gets ‘Infrastructure Finance Company’ status from RBI

IREDA gets ‘Infrastructure Finance Company’ status from RBI

March 15, 2023
Revamped MSME Competitive (LEAN) scheme

Revamped MSME Competitive (LEAN) scheme

March 14, 2023
Bhutan graduates from UN list of Least Developed Countries (LDC)

Bhutan graduates from UN list of Least Developed Countries (LDC)

March 13, 2023
What is hustle culture?

What is hustle culture?

March 13, 2023
Har Payment Digital mission of RBI

Har Payment Digital mission of RBI

March 9, 2023
SEBI issues framework for the adoption of cloud services

SEBI issues framework for the adoption of cloud services

March 9, 2023
Hallmark Unique Identification(HUID) number

Hallmark Unique Identification(HUID) number

March 6, 2023
SWAYATT

SWAYATT

March 3, 2023
International IP Index

International IP Index

March 2, 2023
India’s first municipal bond index- IBMX

India’s first municipal bond index- IBMX

February 28, 2023
Please login to join discussion

Our Offline Classroom Student

CONGRATULATIONS TO 2021 TOPPERS !!!

Rank 171 Kumar Shivashish
Rank 250 Sahithya
Rank 263 Sumit Kumar Thakur
Rank 311 Deepak Ramachandra Shet
Rank 455 Ravinandan B M

March 2023
MTWTFSS
 12345
6789101112
13141516171819
20212223242526
2728293031 
« Feb    

Browse by Category

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tags

AIR All India Radio BBC Business Line Business Standard dow Down to Earth DownToEarth DTE Economic Times ET FAO Financial Express GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express Indiatoday India today Kurukshetra Livelihoods portal LiveMint Mains News Newspaper News Paper PIB Prelims PRS India RSTV Science Reporter Survey The Hindu The India Express The Indian Express The Print the wire Times of India TOI TOPPERS Yojana
JournalsOfIndia

Our vision is to orient the readers to grasp the facts objectively and analyse critically. In the rush of reaching first to the readers, the websites miss the balanced opinion, which is the need of the hour. We aim to reach the readers with more crispness, preciseness and relevance. We bring the articles in UPSC way for the civil services aspirants and the Wisest Way for general readers.

Categories

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tag

AIR All India Radio BBC Business Line Business Standard dow Down to Earth DownToEarth DTE Economic Times ET FAO Financial Express GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express Indiatoday India today Kurukshetra Livelihoods portal LiveMint Mains News Newspaper News Paper PIB Prelims PRS India RSTV Science Reporter Survey The Hindu The India Express The Indian Express The Print the wire Times of India TOI TOPPERS Yojana

Newsletter

The most important UPSC news and events of the day.

Get Journals daily newsletter on your inbox.

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

  • Login
  • Sign Up
  • Home
  • SNIPPETS
  • ARTICLES
  • BROWSE
  • DOWNLOADS
No Result
View All Result

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In