While the Festival Advance Scheme is meant for the Central Government employees, the LTC Scheme may also be availed by state governments and private sector organisations.
With the advent of the ‘Experience Era’, the medium has evolved to become even more critical for enterprises to understand their customers and forge meaningful relationships for the long term.
To boost the economic activities that had got satlled by Covid-19 lockdown, the Modi government has introduced two schemes – Festival Advance Scheme and LTC Scheme – which are expected to lift the festive mood and boost demand for non-essential goods during the festival season.
While the Festival Advance Scheme is meant for the Central Government employees, the LTC Scheme, apart from government, PSB and PSU employees, may also be availed by state governments and private sector organisations.
Under the Festival Advance Scheme, Rs 10,000 to be paid as interest-free advance to government employees, who want to avail it, and the amount has to be paid back by the employees in not more than 10 instalments.
However, the advance of Rs 10,000 will not be paid in cash, but would be released through pre-loaded Rupay Card from SBI to be called the UTSAV card.
LTC Cash Voucher Scheme
Under the LTC Cash Voucher Scheme, the employees would get cash in lieu of Leave Travel Concession as reimbursement.
Depending on the slab an employee is entitled to avail, he/she will get the slab amount for himself/herself and his/her family members reimbursed along with the entitled leave encashment amount, on spending three times the aggregate slab amount and the leave encashment amount.
How to Spend
As the Festival Advance of Rs 10,000 will be provided with a prepaid Rupay Card loaded with the amount, there is no option but to spend the amount digitally. Purchases may be done at a shop that accepts card payments or at online market places like Flipkart, Amazon etc.
Payments for purchases under LTC Scheme may be done digitally or by cash, but there will be no advantages for cash payments as reimbursements will be given on submission of GST invoice on purchase of goods with 12 per cent or more GST rates.
Boon for Digital Payments
As there is no advantage in cash payments, consumers availing the schemes will be in beneficial position by spending through digital mode as they may get cash backs, additional time to pay the amount spent through credit card etc. So, both the schemes would boost digital payments.
“Employees of central and state governments as well as public sector companies will be able to use these schemes to spend money on festivals of their choice till March 31. The scheme also encourages accelerating digital payments among those availing these benefits. Employees will have to provide GST invoice as this also a direct indicator for digital transactions. This translates to the impetus given to digital payments by the government and fuel consumer spending,” said Nityanand Sharma, Co-founder & CEO, Simpl, a ‘buy now, pay later’ service provider.