Prime Minister Narendra Modi on Saturday announced a slew of sops for the poor, farmers and small traders, the groups perceived to be worst hit by the November 8 demonetisation that caused widespread economic upheaval in the country.
On New Year’s eve address that sounded more like a budget speech, Modi announced interest subvention on housing for the urban and rural poor, provided enhanced credit guarantees to small traders and MSMEs, gave a 60-day interest waiver on select farm loans, and ensured higher interest earnings for senior citizens. He also directed cash-rich banks to go out of the way to help the not-so-privileged.
Modi, in his 45-minute speech announced that the government would give rebates of four and three per cent for home loans of up to Rs 9 lakh and Rs 12 lakh, respectively, under the Pradhan Mantri Awas Yojana (PMAY) in 2017. He said that the government has decided to enhance the credit guarantee for Micro Small and Medium Enterprises (MSMEs) from Rs 1 crore to Rs 2 crore.
Possibly keeping in mind the model code of conduct that will come into force once elections to five state assemblies, including in Uttar Pradesh, are announced next week, the Prime Minister flagged off several schemes aimed at helping the poor. Farmers who have taken loans from district cooperative banks and societies have been granted waiver on interest for a period of 60 days. “The amount of the 60-day interest waiver will be directly transferred to the farmers’ accounts,” he said.
Striking an emotional note in a speech where he lauded India’s “125 crore people” for bearing with the pain of the demonetisation fallout, he said thousands of people had written to him about the hardships they faced. Terming demonetisation as a “historic cleansing ritual”, Modi said people of the country had taken the biggest “shudhi yagna” after Diwali, and had, through their stoicism in the face of adversity, proved that a majority of Indians wanted freedom from corruption. He thanked people for standing by him despite all the inconveniences which have been brought about by the policy of banning Rs 500 and Rs 1,000 currency notes. He, however, didn’t give any figures on the amount of old currency deposited in banks after the demonetisation.
- 8% interest rate will be guaranteed on deposits of up to Rs 7.5 lakh for 10 years for senior citizens; interest will be paid monthly
- 2 new schemes under PMAY to provide 4% interest waiver on loan of up to Rs 9 lakh and of 3% on loan up to Rs 12 lakh
- Only 24 lakh people have declared their income of being over Rs 10 lakh
- Banks have been asked to raise cash credit limit to small business to 25% from 20%
- Rs 6,000 to be put into accounts of pregnant women in 650 districts for vaccination and other medical use
- A 60-day interest waiver for farmers who have taken loans from district co-op banks and co-op societies