Prime Minister Narendra Modi, while addressing the Nation on December 31, 2016, on the New Year’s Eve, thanked people for patiently bearing the pain caused by the Government’s decision to demonetise Rs 500 and Rs 1,000 currency notes.
- In his address to the nation, PM Modi also made a series of announcements aimed at the welfare of the entire Citizen of the Country with main focus on the senior citizens, farmers, rural housing, women and small entrepreneurs to lighten the burden of demonetization.
Key Points of the Announcements
- PM Modi announced two new housing schemes for the urban poor. As per the decision, home loan taken by urban poor in 2017 up to Rs. 9 Lakh would get 4 percent subvention on interest while 3 percent subvention on interest on home loans of up to Rs. 12 Lakh.
- In villages, taking home loans of up to Rs. 2 Lakh for new housing or extension of housing in 2017 would attract 3 percent subvention on interest.
- The number of houses being built for the poor, under the Pradhan Mantri Awaas Yojana in rural areas has also been increased by 33 per cent.
PM also announced to convert 3 crore Kisan credit card into RuPay card in the next 3 months. The problem with Kisan Credit Card is that farmers need to go to bank to withdraw money, but RuPay Card will enable them to buy/sell directly through the card.
- He also announced to waive 60-day interest on farm loans taken in the Rabi season from District Cooperative Banks and Primary Societies. This means that the banks will not charge any interest for 60 days on loans and that amount would be beared by the Government.
- NABARD created a fund of Rs 21000 crore to Dstrict central Cooperative Banks in November 2016 to provide loan to farmers for Rabi season. Government has decided to add Rs 20,000 crore more to this along with giving the loan at subsidized rate. The loss that NABARD would suffer by giving loans to cooperative banks, societies at low interest rate shall be borne by Government.
- The Prime Minister said that senior citizens would get a monthly fixed interest of 8% on their deposits of up to 7.5 lakhs for 10 years.
- A sum of Rs 6000 would be deposited in the account of pregnant and lactating women in above 650 rural districts to meet medical expenses. The scheme would initially be implemented in form of a pilot project in 53 districts, with the amount of Rs 4,000
MSME(Micro, Small and Medium Enterprises)
To give a boost to the small entrepreneurs, the government has taken certain decisions in the interest of small and medium businesses, which will also boost employment.
- PM Modi said that the cash credit limit for small businesses would be raised to 25 per cent from 20 per cent. The Credit guarantee for Micro Small and Medium Enterprises would be raised to Rs 2 crore from current Rs 1 crore.
- Earlier, the scheme only covered bank loans, but now it will cover loans given by NBFCs (non-banking financial companies) as well.
- 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.
- Government also announced that earlier the tax on Income of businesses with turnover of up to Rs 2 crore was calculated at 8 per cent of the turnover. Now, for such businesses income from digital transactions will be calculated at 6 per cent. This will effectively reduce their tax liability by 25 per cent.
- For MUDRA Yojana, Modi said that last year nearly 3.5 crore people benefitting from it. The government now aims to double this, giving priority to dalits, tribals, backward classes and women.