Prime Minister Narendra Modi on Saturday unveiled a relief package for farmers, senior citizens, small enterprises, women and the rural poor as a return gift of sorts for enduring the pain caused by the Centre’s decision to scrap the legal tender nature of old ₹500 and ₹1,000 notes. He also acknowledged that crores of citizens had to stand in queues for hours to withdraw their own money.
Linking the surge of black money to the unavailability of affordable housing for the poor and the middle class, Mr. Modi announced a special scheme under the Pradhan Mantri Awaas Yojana to provide an interest subvention of 4 per cent on loans up to ₹9 lakh and 3 per cent on loans up to ₹12 lakh for urban housing.
A similar scheme would be rolled out for the rural poor to get a house-building loan of up to ₹2 lakh at a 3 per cent lower interest rate.
While appreciating the endurance of the people at large in supporting the government’s move to replace old currency despite facing genuine hardships, the Prime Minister said, “The lack of cash in the economy is very painful, but an abundance of cash is also problematic. Our attempt is to seek a balance on this front. ”
Guaranteed interest rate
Promising to convert three crore Kisan credit cards to Rupay cards in the next three months, the Prime Minister flagged the inconvenience posed by Kisan credit cards which require farmers to go to the bank to withdraw cash against their credit limit. With a Rupay card, they will be able to make transactions for farm inputs without visiting the bank, he said.
Mr. Modi also announced a guaranteed 8 per cent return on bank deposits up to ₹7.5 lakh made by senior citizens for a period of 10 years.
Farm sector credit
He also announced a virtual doubling in the credit flow to the farm sector via district central co-operative banks and primary societies, with the Centre bearing the interest cost for 60 days on existing loans availed by farmers.
This interest subvention will be credited to farmers’ accounts and an additional ₹30,000 crore is being provided by the Centre to the National Bank for Agriculture and Rural Development (NABARD). to lend to co-operative banks and societies at a lower interest rate. Again, the losses NABARD may incur on this account will be borne by the Centre, Mr. Modi said.
While requesting banks to pay closer attention to the needs of the poor and smaller enterprises in their day-to-day operations, he said this was a golden opportunity for them to change their traditional approach as they have never received such large deposits in such a short period of time. However, he didn’t announce any timeline for lifting the restrictions on withdrawals from banks.
Mr Modi also raised the credit guarantee for small businesses from Rs 1 crore to Rs 2 crore and said this will help boost job creation. Small retailers and traders would benefit from this move, which would also guarantee credit extended by non-banking financial companies, the PM said.
Banks have also been directed to raise the cash-credit limit from 20 per cent to 25 per cent for such businesses and raise the working capital loans from 20 per cent to 30 per cent to the extent that such traders transact in a cashless mode.
The PM also enhanced the maternity benefits given to pregnant women for pre-natal care to Rs 6,000 from the existing level of Rs 4,000 and declared that this benefit will now be available for women in all 650 districts of the country. Currently, the scheme is only working as a pilot project in 53 districts, he pointed out.
“The dawn of the new year is bringing the resolve for new successes. Let us all work together overcoming all obstacles to create a bright future,” the PM said in conclusion of his 40-minute address to the nation.
Promising to take stern action against bank and government officials caught with a hand in the till over the past fifty-odd days in the process of exchanging old high-value currency notes, the PM said: “In some banks, some serious crimes by people have come to light and in some places, government officers have also been seen shamelessly attempting to carry on with habitual corruption and offences. They will not be spared.”
While appreciating the endurance of the people at large in supporting the government’s move to replace old currency despite facing genuine hardships, the PM said, “the lack of cash in the economy is very painful, but an abundance of cash is also problematic. Our attempt is to seek a balance on this front. ”
Red-flagging the fact that just 24 lakh Indians have a declared income of Rs 10 lakh, the PM said, “Either you will laugh or you will get very angry on hearing this… Can any citizen digest this fact? How long can we keep turning away from such truths?”
“You must have also seen in your neighbourhood, there are so many big bungalows and big cars… In the country’s big cities, any one of the cities alone, you will find lakhs of people with incomes of over Rs 10 lakh,” the PM said.
Assuring people that the law will come down with its full force on the dishonest, the PM said the government’s priority is also to help and protect the honest.
“It is a bitter truth that people’s experience with some government officers and red tapism is unpleasant. We can no longer ignore this,” he said, adding that it’s the responsibility of officers at all levels of government to protect the rights of ordinary citizens, help the honest and isolate the dishonest.
While he stopped short of taking up the issue of electoral funding reforms, the Prime Minister said all debates on corruption and black money include political parties, political leaders and election funding.
“The time has now come that all political leaders and parties respect the feelings of the nation’s honest citizens, and understand the anger of the people. I urge all parties and leaders to move away from a “holier than thou approach” to come together in prioritising transparency, and take firm steps to free politics of black money and corruption,” he said.
He reiterated his proposal for holding simultaneous State assembly and Lok Sabha elections and said the common man and even the President has often advocated the idea.
Calling for a serious debate on the idea, Mr Modi said, “This is to break the endless cycle of elections, reduce election expenditure, and minimize pressure on the administrative machinery.”
