While the PM warned the corrupt, including government officials, that they would not be spared, he said nothing about the promised crackdown on benami properties.
He had homilies about how people had supported the “historic yajna of purification” to weed out corruption from society and likened it to the unity of purpose that Indians had displayed during the wars of 1962, 1965, 1971 and Kargil.
That the PM would announce schemes for the poor was expected, with the elections to five states, including key Uttar Pradesh, slated for February-March.
To justify the note ban move and the suffering it had caused to the people, Modi invoked such leaders as Lal Bahadur Shastri, Ram Manohar Lohia, Jayaprakash Narayan and K Kamaraj. He said these leaders, if alive, would have blessed and lauded the sacrifice of the people. He also said perseverance shown by the people was reminiscent of Mahatma Gandhi’s Champaran satyagraha of 1917.
There was also a tacit acceptance from the PM that people, particularly in the cash-dependent informal sector, had suffered much since. He advised banks to ensure supply of currency in rural and remote areas in the days to come.
The PM said the note ban has forced the money from the parallel economy into the formal banking system, and promised that technology would help plug loopholes. He spoke at length about his commitment to the welfare of the poor and how the move would strengthen the marginalised — people living in rural areas, Dalits and women.
“You would either laugh or get enraged if I were to tell you that only 24 lakh people in this country admit to earning more than Rs 10 lakh per annum,” he said.
Modi added, "If we look at any big city, it would have lakhs of people with annual income of more than Rs 10 lakh. Do you not feel, that for the good of the country, this imaandari andolan (movement for honesty) needs to be further strengthened?"
The PM urged all political parties and leaders to move away from a “holier than thou approach”, understand the anger of the people and come together to ensure transparency in political funding. He also advocated simultaneous conduct of state and national
elections to reduce election expenditure and minimise pressure on the administrative machinery.
But, some regional leaders were not impressed. West Bengal Chief Minister Mamata Banerjee said, "Modi babu wanted 50 days to deliver promises. He badly failed. The PM, who runs the nation in the name of shuddhikaran (cleansing), just underwent buddhiharan (losing one's mind)."
In a major fillip to the government’s housing for all initiative, Modi announced two schemes under the Pradhan Mantri Awas Yojana (PMAY). Those wishing to construct or expand their homes in rural India will get loans of up to Rs 2 lakh, with a three per cent interest relief. Housing for the rural poor will be increased by 33 per cent.
Low-interest loans will be available to the urban poor.
“We are launching two housing schemes. In 2017, those who want to construct homes will get up to four per cent interest subsidy on loan amounts up to Rs 9 lakh and three per cent on loans up to Rs 12 lakh,” he said.
Under PMAY, the government plans to cover around two million non-slum urban poor households. Hence, total housing shortage envisaged to be addressed through the new mission is 20 million, the government has said.
The PM slammed those who had created the “misperception” that the farmers had suffered because of demonetisation. He said rabi sowing was up six per cent and fertilisers taken by farmers had gone up nine per cent in 2016.
Modi announced a 60-day interest waiver for rabi-crop loans from district cooperative central banks and primary societies. “Farmers who have paid interest during the last two months will receive these amounts back, directly into their bank accounts,” the PM said.
The government would also add Rs 20,000 crore to a long-term irrigation fund under Nabard, Modi said. This would be in addition to the Rs 20,000 crore promised in the last Budget by Finance Minister Arun Jaitley. The fund was set up last month.
“The loss that Nabard suffers by giving loans to cooperative banks and societies at low interest rates shall be borne by the Government of India,” Modi said. He added 30 million farmers holding Kisan Credit Cards will be given RuPay credit cards within three months.
A major area of focus in Modi’s speech was medium, small and micro-enterprises. During the demonetisation drive, reports were coming in from all over the country of small businesses shutting down temporarily, not being able to pay employees, and not getting new orders.
Modi said the Centre would underwrite loans up to Rs 2 crore given by banks to new businesses, up from Rs 1 crore. This scheme will cover non-banking financial companies (NBFCs) as well.
“This decision will enable better access to credit for small shop owners and small enterprises. Banks and NBFCs will not levy high interest on these loans, as government is bearing the cost of underwriting them,” the PM said.
“The government has also asked banks to raise the credit limit for small industry from 20 per cent of turnover to 25 per cent. Banks have also been asked to increase working capital loans from 20 per cent of turnover to 30 per cent, for enterprises that transact digitally,” he said.
Modi also announced tax incentives for small businesses with turnover of up to Rs 2 crore per annum. The income of such businesses was calculated at eight per cent of turnover. Their income from digital transactions would now be calculated at six per cent, Modi said.
Launching a new scheme for pregnant women, the PM said Rs 6,000 would be directly transferred to bank accounts of those who undergo “institutional delivery” and vaccinate their children. “This scheme will help reduce the maternal mortality rate, in a big way,” he said and added so far, pregnant women in 53 districts were being given financial assistance of Rs 4,000, under a pilot project.
Modi said senior citizens would receive a fixed interest rate of eight per cent for a period of 10 years, on deposits up to Rs 7.5 lakh in banks. While there are existing schemes in post offices offering similar returns for senior citizens, this is now being imposed on banks as well.
The PM also said the scope of MUDRA Yojana would be doubled with priority to Dalits, tribals, backward classes and women.
Reacting to the PM's speech, State Bank of India Chiarman Arundhati Bhattacharya said, “Initiatives aimed at benefiting the lower income segments of the country is indeed a welcome move by the government. It is fairly evident that the government is serious about comprehensive inclusion. Low-cost housing should witness growth in the medium to long term. The government's commitment to a less-cash society will also aid in reforming the tax structure for the better.”
In his address to the nation on New Year’s Eve, Prime Minister Narendra Modi gave out the promised “gains” after 50 days of demonetisation “pain”.
Housing for all
Interest relief of 4% for home loans up to Rs 9 lakh; 3% for up to Rs 12 lakh
3% interest waiver on loan up to Rs 2 lakh for building or expansion of houses in rural areas
33% extra housing stock under Pradhan Mantri Awas Yojana
Govt to bear 60-day interest in farm loans from district cooperative central bank and primary society loans
30 million Kisan Credit Cards will be converted to RuPay debit cards in 3 months
Micro, small and medium enterprises
Credit guarantee for small traders: Increased to Rs 2 crore from Rs 1 crore. Govt to provide cover for banks and non-banking financial companies
Hike in cash-credit limit: Banks to increase cash-credit limit to 25% from 20%
Working capital loans: For digital transactions, cash credit limit increased to 30% from 20%
Lower interest: For businessmen with annual turnover of Rs 2 crore, tax on digital transactions will be 6%
Pregnant women: Rs 6,000 for registration, delivery, vaccination and nutrition
Senior citizens: Guaranteed 8% interest on bank deposits of up to Rs 7.5 lakh for 10 years