It is important to devise ways and methods to generate consumer demand in the market looking to adverse economic impact of COVID-19 pandemic. As one of the measures towards that end and to encourage more spending keeping in view the upcoming seasons of festivals, the Central Government has allowed payment in cash, in lieu of availing of Leave Travel Concession (LTC) facility and Rs.10000 festival advance to Government employees. In addition to it, the Union Finance Minister has announced additional capital spending besides Rs.12000 crore, 50 year free loan to states so as to give boost to the economy.
However, the cash in hands thus got through these twin measures has to be spent on buying goods attracting GST of 12 percent or more – a condition that pre-empts cash being spent on food items. Public Sector Banks, however, already have the scheme of granting cash in lieu of availing the Travel facility through the shortest route to the destination , the limit of kilometres of which too is mentioned. However, the Finance Minister has asked all Public Sector Enterprises to follow suit. Necessary Income Tax exemption cash vouchers shall be given to employees in lieu of their entitled travel allowance this year. These measures are expected to generate consumer demand of more than Rs.28000 crore.
Care has to be taken that no further push resulted in the inflation and a common citizen did not suffer as presently we are experiencing a rise in the consumer price index (CPI) inflation of food items especially vegetables, fruits etc. The Reserve Bank of India, therefore, is expected to take further measures towards ensuring price stability in the economy though the current pandemic has disturbed almost all economic variables.
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