New Delhi: With the crucial Assembly elections in Uttar Pradesh and Punjab approaching and a few days left for the announcement of the poll schedule and model code of conduct to kick in, Prime Minister Narendra Modi on New Year’s eve announced a slew of measures for the poor, farmers, middle-class, small businesses, senior citizens and women.
The measures seem to be an attempt to offer relief to economically backward sections hit hard by his sudden move to demonetise high-value currency and push the country towards a less-cash economy.
Mr Modi’s announcement on November 8 to scrap 86 per cent of the cash in circulation to fight black money and fake currency led to a cash crunch, hitting India’s largely cash-based economy and clouding growth forecasts.
Though Mr Modi promised to restore normalcy by December-end, queues have stayed outside low-on-cash banks and ATM kiosks.
In his televised address to the nation on Saturday, the PM thanked people for their “support” to demonetisation and acknowledged the pain they had to go through. He said efforts were on to ensure normal banking resumes as soon as possible.
He praised bankers for their hard work, but also warned that “shameless efforts” by some to benefit would not be tolerated, referring to a string of cash seizures after Rs 1,000 and Rs 500 notes were scrapped. The Opposition immediately criticised his speech, saying his move to promote digital transactions was an afterthought to cover up ‘no real black money windfall’.
“India has gone through a shuddhi yagna (purification ritual) since Diwali… People have shared their experiences and pain with me… It will be an example for generations…Kuchh to baat hai ki hasti hamari mitati nahi…” he said a day after the government’s 50-day demonetisation drive ended.
The scramble for cash has also caused a string of deaths, prompting an Opposition campaign against the government, disrupting an almost entire Parliament session.
The PM said his war on corruption would only intensify. “You might either laugh or get angry to know that only 24 lakh people in the country admit that their income is more than Rs 10 lakh. Every city you see has people with large bungalows and cars. Don’t you think the fight against black money and corruption deserves more power?” he asked.
The PM who did not use the word “mitron” (friends) in his address said, “Brothers and sisters, law will do its job, punish the guilty. But for the government the priority is to secure the honest and ensure that honesty is more widely established.”
While offering the sops, the PM also weaved in his pet theme of holding simultaneous polls to the Lok Sabha and state legislatures. “Time has come to start a debate on this issue,” he said.
Speaking about how demonetisation has worked to weed out black money, check use of fake currency by terrorists, and contain human trafficking, the PM asked political parties to keep aside their “holier than thou” image and join hands to end political corruption from the system.
In his 43-minute address, which sounded like a budget speech, Mr Modi tried to reach out to a cross-section of people. He said that pregnant women would get a financial assistance of Rs 6,000 in over 650 districts. Currently it’s Rs 4,000 in 53 districts. He also announced a four per cent interest cut in home loans of up to Rs 9 lakh for urban poor. There would be a three per cent interest cut in home loans of up to Rs 12 lakh in cities.
The PM said there would be a 33 per cent increase in housing across rural India. There would also be a three per cent interest cut in loans to build or renovate homes in villages. Senior citizens would get a guaranteed interest of at least 8 per cent on deposits up to Rs 7.5 lakh.
For small businesses, he increased credit guarantee from Rs 1 crore to Rs 2 crore. Cash credit limit would go up to 25 per cent, from 20 per cent.
Claiming that there was a six per cent increase in sowing during the last season, the PM announced that his government would bear 60 days’ of interest incurred on farmer loans. This amount will be directly transferred to farmers’ bank accounts. He said 3 crore Kisan cards would be converted into RuPay cards in three months.
