Agency
New Delhi: In a bid to soften the blow of demonetisation effects, Prime Minister Narendra Modi on Friday night announced a hosts 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” against the “dishonest”.
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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 up to 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 up to 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 up to 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.
The government is introducing a nationwide scheme for financial assistance to pregnant women wherein Rs 6000 will be transferred directly to their bank accounts. This will cover women who undergo institutional delivery and vaccinate their children.
Thanking the people for their firm resolve and infinite patience in facing difficulties with a smile and a concept of sacrifice, he said Indians have displayed the strength of people power, utmost discipline and the ability to discern the truth in a storm of disinformation.
“My effort is to take the banking system to normalcy as fast as possible in the new year. I have asked all concerned officers in the Government to focus their attention to this task. They have especially been told to pro actively resolve the problems in rural and remote areas,” he said.
Modi said what was done in India has no precedence globally and added that over last 10 to 12 years, 500 and 1000 currency notes were used less for legitimate transactions and more for parallel economy.
Maintaining that in the fight against corruption and blackmoney, it is natural to debate the fate of the dishonest.
“What punishment will they get? The law will take its own course, with its full force. But the priority of the Government now is how to help the honest, protect them, and ease their difficulty. How can honesty gain more prestige?
“This Government is a friend of good people. And it aims to build an enabling environment for the dishonest to return to the path of goodness,” he said.
In order to protect senior citizens from any decline in interest rates, Modi said they will get a fixed 8 per cent return on 10-year bank deposits of up to Rs 7.5 lakh.
Senior citizens (60 years and above) will get monthly interest under this scheme, he added.
“We are initiating a scheme for senior citizens. Banks often reduce their deposit rates when they receive a large volume of money. This should not adversely impact senior citizens.
“Under the scheme, senior citizens will receive a fixed interest rate of 8 per cent for a period of 10 years, on deposits up to Rs 7.5 lakh. The interest will be paid monthly,” Modi said.
Finance Minister Arun Jaitley termed it “great news” for senior citizens.
“Great news for senior citizens – assured return on fixed deposits,” Jaitley tweeted.
Currently, banks give senior citizens an additional interest of 0.50 per cent over the regular rates on fixed deposits.
Country’s largest lender SBI offers 7 per cent interest rate to senior citizens on fixed deposits of 5 to 10 years tenure.
Following the spurt in deposits after demonetisation, banks are expected to reduce interest rates which will have a bearing on depositors, especially senior citizens as they mainly depend on interest income.
Under the Senior Citizen Savings Scheme (SCSS) at Post Offices, interest at the rate of 8.5 per cent per annum is given on deposits of up to Rs 15 lakh with a maturity period of 5 years.
