STIMULUS

advance, the second component of the consumer spending measure, Sitharaman said the government proposes to restore the festival advance in a one-time measure for its employees. It plans to give an interest-free advance of ₹10,000 per employees through a pre-paid RuPay card that can be repaid in 10 instalments. The beneficiary has to spend the amount through the digital mode by March 31, 2021. All such advances were abolished by the 7th Pay Commission.

For Central government employees, this would entail an expenditure of ₹4,000 crore. If states also join this scheme, conservatively, over ₹4,000 crore of additional consumer demand will be generated, she said.

Speaking about demand generation through capital expenditure, the finance minister said the government has proposed a ₹12,000 crore special interestfree, 50-year loan scheme to states to be spent by March 31, 2021.

According to the scheme, ₹200 crore each will be given to eight Northeastern states and ₹450 crore each to Uttrakhand and Himachal Pradesh. While ₹7,500 crore will be available to other states in proportion to their shares determined by the devolution of the Finance Commission, ₹2,000 crore will be given to those states that meet at least three out of four reforms given in the Atmanirbhar fiscal deficit package, she said.

Announcing the last tranche of the package on May 17, Sitharaman said the Centre had also accepted the demand of states to raise their borrowing limit from 3% of their gross state domestic product (GSDP) to 5%; that would give them additional resources of ₹4.28 lakh crore during the Covid-19 crisis. The increased limit was, however, conditional and depended on implementation of reforms by them in four areas — one-nation, one-ration-card, ease of doing business, power distribution and urban local body revenues.

Sitharaman said that the government has decided to provide ₹25,000 crore in additional budget for capital expenditure on projects related to roads, defence infrastructure, water supply, urban development, defence infrastructure and domestically produced capital equipment. “Allocations will be made in forthcoming revised estimate [RE] discussions of the ministry of finance with concerned ministries,” she said. The budget already provides for ₹4.13 lakh crore of capital expenditure in the current financial year.

Referring to the ₹20.97 lakh crore economic stimulus-cumrelief package announced between March 26 and May 17, Sitharaman said that while the needs of the poor and the weaker sections have been addressed in the Atmanirbhar Bharat (SelfReliant India) package, current proposals are designed to stimulate demand “in a fiscally prudent way” so that “today’s solution should not cause tomorrow’s problem”.

Economic affairs secretary Bajaj said the package was prepared keeping fiscal prudence in mind and it will not require any additional borrowing in the current financial year. In May, the government had already raised its gross market borrowing target for FY 2021 to ₹12 lakh crore from ₹7.8 lakh crore budgeted in February. The borrowing limit was increased to combat the sudden outbreak of the Covid-19 pandemic and subsequent lockdown.

“The much awaited second round of fiscal stimulus, amounting to a little less than 0.4% of the estimated FY21 GDP is roughly divided equally into boosts to capital expenditure of ₹37,000 crores, and consumption expenditure of ₹36,000 crores,” said DK Srivastava, chief policy advisor at consulting firm EY India.

“These direct expenditure commitments may be supplemented by an increase in private expenditure since government employees have been given an incentive to spend on goods and services bearing a GST rate of 12% or above. This scheme, however, may be beset by excessive conditionalities,” he said. accused, the police have also arrested Shailendra Nath Pathak, Mayank Shivhare, Vipin Tiwari, Monu Parya, Dharmendra Sen and Sanjay Kushwaha,” the SSP added.

Jhansi’s district magistrate Andhra Vamsi said directions had been issued to Sipri Bazaar police to file a charge sheet soon, adding that the case would be tried in a fast-track court. He also said psychological help had been arranged for the rape victim to help her cope with the trauma.

Naveen Kumar, the principal of Jhansi Polytechnic College, said Saini and Kushwaha were second year students and that the institute was cooperating with the police in establishing the identities of other students involved in the incident.