Finance Minister Nirmala Sitharaman made a slew of announcements today to stimulate consumer spending and capital expenditure. They included a special LTC cash voucher, a special festival advance scheme, and interest-free loans to states for capital expenditure. LTC stands for leave travel concession. Sitharaman said that the LTC funds could be used to spend on goods and items in 12 per cent GST category i.e. the government would give cash to employees in lieu of LTC ticket fare component for buying items attracting 12 per cent or more GST.
The travel fraternity is not impressed with the announcement as this move will act as a deterrent for the tourism sector which was pinning its hope on the revival of business during the festival season when people look to travel to their home states. After almost eight months of nil to limited tourism activity, the festival season was expected to be one of the few demand drivers. The industry was hoping for more tax-based stimulus in the hands of all citizens to travel when spent against GST-rated travel agents, hotel tour operators, tourist transporters and restaurants.
“The Tourism industry instead of being bailed out is now deprived of the LTC fund. Our Industry is dying and our employees are losing jobs in every avenue but our own Prime Minister has forgotten our existence, the backbone of India. This LTC funds should have been utilised in the ‘Dekho Apna Desh’ by which the Prime Minister Vision would have been achieved. Countries are getting second bailouts, we haven’t even got one,” stated Jyoti Mayal, President, TAAI, as a reaction to the announcement.