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Intention of new LTA scheme is to stimulate demand not collect taxes, says TV Somanathan

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Intention of new LTA scheme is to stimulate demand not collect taxes, says TV Somanathan

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The intention of the leave travel allowance (LTA) is not to collect tax revenue, TV Somanathan, Expenditure Secretary told CNBC-TV18 in an interview. "It is intended to stimulate demand from a section of the society, which has a very protected salary income," he explained.

The intention of the leave travel allowance (LTA) is not to collect tax revenue, TV Somanathan, Expenditure Secretary told CNBC-TV18 in an interview. "It is intended to stimulate demand from a section of the society, which has a very protected salary income," he explained.
"Our intention is to encourage our staff to spend. We want them to spend on the things that stimulate consumer demand for products and services in the market. Tax collection is incidental… we aim to make people spend Rs 3 with Re 1 coming from the government and Rs 2 coming from their own savings, which is a reasonable expectation," Somanathan added.
For both state and central government employees, the option of taking cash and paying income tax does not exist, he said.
When asked about the next set of stimulus measures, he said, "It will come when it comes."
However, he expressed optimism on infrastructure activity picking up. "The fall in the first six months is primarily because we had one quarter where most infrastructure activities came to a halt. We are fairly confident that the deficit will be made up in the remaining months. in addition to the budgeted capital expenditure, we have added Rs 25,000 crore in the package that the minister has announced. I am optimistic that we will spend both the budgeted and the additional Rs 25,000 crore."
Somanathan also shared his views and outlook on the goods and tax services (GST) compensation as well as on India's debt-to-GDP ratio.
To know more, watch the video.
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