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Rs 73,000 Crore To Stimulate Consumer Spending In The Economy

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Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman on 12 October. 2020 announced measures of Rs 73,000 crore to stimulate consumer spending in the economy in an effort to fight the slowdown due to COVID-19 pandemic following lockdown. Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur was also present during the announcement of stimulus package.

While announcing the demand stimulus package, Smt. Sitharaman said, “Indications are that savings of government and organised sector employees have increased and we want to incentivise such people to boost demand for the benefit of the less fortunate.” The Finance Minister further said that if demand goes up based on the stimulus measures announced today, 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 stressed on the idea that today’s solution should not cause tomorrow’s problem. Smt. Sitharaman 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 proposals presented by the Finance Minister are designed to stimulate spending in a fiscally prudent manner as some of the proposals are for advancing or front-loading of expenditure with offsetting changes later while others are directly linked to increase in GDP. The present announcement by Smt. Sitharaman highlights the active intervention by the Government of India to combat economic slowdown created by COVID-19.

Finance Minister announces measures of Rs 73,000 crore to stimulate consumer spending before end of this Financial Year in fight against COVID-19

• Cash payment and leave encashment in lieu of one LTC during 2018-21 according to entitlement
• Special Festival Advance Scheme revived as a one-time measure for both Gazetted and non-Gazetted employees
• Special interest free 50-year loans to States for capital expenditure for Rs. 12,000 crore
• 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