File photo: VCG

India's federal government Wednesday announced around 507.7 million U.S. dollars as bonus to over 3 million non-gazetted employees with a view to encourage spending during the upcoming festival season.

The decision to give bonus was taken at the meeting of the union cabinet chaired by Prime Minister Narendra Modi, federal minister for information and broadcasting Prakash Javadekar said.

"The bonus, to be given in a week's time, will encourage the middle-class to spend and thus, add to the demand in the economy," he said.

The bonus will be given in a single instalment through direct benefit transfer.

Earlier this month, the country's finance minister announced a number of measures to induce government employees to spend in the upcoming festive season.

The move to stimulate consumer spending included Leave Travel Concession (LTC) cash voucher scheme and Special Festival Advance Scheme.

The ongoing COVID-19 pandemic has seriously impacted the country's economy.

The announcement of a lockdown on March 24 paralyzed economic activities and badly hit the economy, resulting in the loss of jobs.