PM Modi Offers Sops Post Demonetisation, Warns Dishonest Of Action

New Delhi: In a bid to soften the blow of demonetisation effects, Prime Minister Narendra Modi on Saturday announced a host of sops for rural and urban poor, middle class, women and senior citizens while sending out a tough message that law will come down with "full force" on the "dishonest".

Addressing the nation at the end of 50 day period post surprise decision to ban 500 and 1000 rupee notes, he did not set out any roadmap for withdrawal of the cash curbs in banks but made it clear that his attempt was to restore normalcy as fast as possible in the new year.

He vowed that fight against black money and corruption cannot be allowed to stop or slowdown. In what looked like a mini-Budget speech, the Prime Minister announced that loans of upto Rs 9 lakh taken in the new year under two new scheme of Pradhan Mantri Awas Yojana will receive interest subvention of 4 per cent and loan of upto Rs 12 lakh will get a 3 per cent interest waiver.

For rural areas, the number of houses being built for poor will be increased by 33 per cent. In addition, another scheme is being put in place for neo middle and middle class in rural areas where loans upto Rs 2 lakh for new housing or extension will receive an interest subvention of 3 per cent. Farmers will get 60 days waiver from payment of interest on crop loan taken for the winter rabi sowing and those who have already paid will get back the money in their accounts.

They will get even better access to loans from cooperative societies with the government adding Rs 20,000 crore to the Rs 21,000 crore fund created by NABARD last month.

He said the government has enhanced the limit of underwriting of loans given by banks to small business from Rs 1 crore to Rs 2 crore. Banks and NBFCs will not levy high interest as the government is bearing the cost of underwriting them.

Modi’s New Year Speech - Key Takeaways

• Two new schemes under PM Awaas Yojna. Home loans for poor and middle class people upto Rs 9 lakh will get 4 per cent exemption on interest and 3 per cent upto Rs 12 lakh
• Sixty days interest waiver for farm loans taken from from district co-operative banks and co-operative societies
• Eight per cent interest up to Rs 7.5 lakh deposit by senior citizens in banks has been assured
• Credit guarantee for Micro Small and Medium Enterprises to be raised to Rs 2 crore from current Rs 1 crore
• Pregnant women across India will be given Rs 6,000 in their bank accounts to take care of initial medical needs
• Government will convert 3 crore Kisan Credit cards to RUpay Credit cards
• Banks have been asked to raise cash credit limit for small businesses to 25 per cent from 20 per cent

Modi’s New Year Speech - Reaction From The Opposition Parties

• Slamming Prime Minister Narendra Modi for his "disappointing" address, the Congress party wondered why he did not mention how many "lakhs of crores" of black money the government managed to wipe out through demonetisation in the last 50 days. Congress Spokesperson Randeep Surjewala said demonetisation has paralysed the economy but the Prime Minister in his address did not answer many crucial questions.

• The Sharad Pawar-led NCP said that Prime Minister Narendra Modi's address to the nation was a budget presentation with an eye on upcoming Assembly elections.
• Terming Prime Minister Narendra Modi's address as "disappointing", Delhi Chief Minister Arvind Kejriwal accused him of "cheating" people and claimed that "not a single penny" of black money was recovered and there was no reduction in corruption due to demonetisation.
• "Tain Tain Fiss! The people of the country will again stand in queue from Monday. Modi speech was emotionless, ineffective, boredom and a pre- budget speech which was crawling on the knees," the Rashtriya Janata Dal (RJD) chief Lalu Prasad said.