PM Modi delivers a mini-Budget speech to heal demonetisation wounds

If on the 52nd day since he announced the dreaded demonetisation drive, and banned the Rs 500 and Rs 1,000 notes on Novemer 8 this year, it was expected that he would discuss why he did what he did,  Prime Minister Narendra Modi poured cold water on those burning questions. Instead, on Saturday evening, he used the New Year's eve to hold out a few carrot sticks and beat the Indian citizenry with no sign of ending the noteban gloom and doom.

PM Modi, despite a much-hyped build-up to the post-December 30 deadline televised address to the nation, announced a string of "measures" that could best be seen as either a trailer for the upcoming Budget, or a financial manifesto to attract the poll-bound states and their beleaguered subjects.

Welfare measures for senior citizens, farmers, pregnant women, the MSME sector as well as rural and semi-rural home buyers have been announced by the PM, after a longish prefatory ode to how Indians want corruption to be wiped out from the sociopolitical horizon.

PM Modi's direct message to the people of India - he addressed them as "doston", chucking the oft-ridiculed "mitron" that had prompted social media memes and jokes - austerity got a thumbs up as he thanked people for enduring the ‘pain’ caused after the government's November 8 decision to demonetise Rs 500 and Rs 1,000 currency notes.

He spoke of "swachhta" and purity and the need to purge the black money, while practically dishing out no data except for a figure that only 24 lakh Indians admit to possessing over Rs 10 lakh (did he mean cash, or in assets? How did he find this number, we do not know.) 

Exactly after a day the RBI had increased the daily withdrawal limit from ATMs to Rs 4,500 from Rs 2,500 per card per day, effective from January 1, 2017 onwards, did the PM speak on the vagaries of the excruciating pain that the Indian citizens have been subjected to, only to couch it in a thick moral frame of righteousness minus rights.

The long, meandering introduction notwithstanding, here are the major announcements that Prime Minister Narendra Modi made on the New Year's Eve. Of course, all of them come with humongous caveats and can be subject to change anytime.

Loan waivers: The government will bear 60 days' interest on select farm loans. This is to target farmers who have suffered in failing to procure seed subsidies, or couldn't buy seeds in time, or couldn't harvest their crops because of cashless conditions. 

Rural housing schemes: The government will offer housing loans at lowered interest rates to include more households in the rural and quasi-rural areas. a) On home loans of up to Rs 9 lakh, for poor and middle class people will get 4 per cent exemption on interest, while b) on loans of up to Rs 12 lakh, the exemption will be 3 per cent.

Also, 33 per cent more homes would be build in rural areas under the Pradhan Mantri Awas Yojana, said PM Modi, indicating that the housing sector, particularly the MSME bracket, can expect upturn.

For pregnant women: PM announced Rs 6,000 assistance for pregnant women. However, it must be mentioned that such a scheme already existed under the UPA rule, but was much neglected during the first two years of Modi regime. Looks like the PM wants to restart the old button, but didn't mention exactly who all will qualify to access the government sop. 

Thanks Indians for "support" on demonetisation: "I am overwhelmed by the public support after demonetisation," said PM Modi, but he didn't mention from where he got his data. If it were from the NaMo app, then we already have a problem. However, poll surveys by independent news channels, including India Today, have indeed found some support for the drive from unexpected quarters, despite widespread setback to the informal economy.

Praise for honest taxpayers: PM Modi said honest taxpayers would get benefit from demonetisation, but there was little to back up his theory as how exactly would they accrue the said benefit. We are putting this under the rhetoric rubric.

RuPay cards: Thirty million kisaan credit cards will be converted into RuPay cards, said the PM. This would mean easier loans, at least on paper, for farmers. However, it's still not clear how is this going to help farmers who have suffered heavy losses due to demonetisation.

Easier credit for MSME sector: The credit guarantee of MSME will be increased to Rs 2 crore from Rs 1 crore, said PM Modi. This is actually the best announcement of the entire lot, which can be tracked from the onset of 2017, and will also reap benefits. However, it remains to be seen that with the daily and weekly withdrawal limits still in place, how the loans and credits would be actually accessed by the MSME entrepreneurs.

While the government is supposed to guarantee loans up to Rs 2 crore for small traders, the cashless conundrum is likely to be a big dampener as expected. 

Senior citizens get a rickety walking stick: For senior citizens, 8 per cent interest on fixed deposits of up to Rs 7.5 lakh for 10 years. Now the question is, isn't the whole purpose of helping senior citizns financially about making money more easily available to them, rather than dangling an interest rate that would only bear fruit after ten long years of waiting? Is PM Modi alert to the needs of India's post-60 individuals, retirees and pensioners? 

Questions remain. And the allegation from Congress too: Only headlines, no deadline. 

Also read: Can government make India go cashless in 2017?