Updated

New Delhi, Dec 31 (PTI): In a bid to soften the blow of demonetisation effects, Prime Minister Narendra Modi tonight 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".

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. 

In a bid to help senior citizens, who often bear the brunt of banks reducing their deposit rates, Modi announced that they will receive fixed rate of 8 per cent for 10 years on deposits upto Rs 7.5 lakh, which will be paid monthly.

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. 

Modi said corruption, black money, and counterfeit notes had become so rampant in India's social fabric, that even honest people were brought to their knees.

"It is historic, that both the people and the government are on the same side in this battle against evil. The Government is well aware, that in this period, you had to queue up, and face difficulty in withdrawing your own money," he said.

He said the excess of cash was fuelling inflation and black-marketing. It was denying the poor, their due. Lack of cash causes difficulty, but excess of cash is even more troublesome. Our aim is to achieve a balance.

When cash is outside the formal economy, it is a cause of worry. When it joins the mainstream, it is an opportunity for development, he said.

The Prime Minister said just 24 lakh people out of 125 crore population declare their annual income of more than Rs 10 lakh. "Can we digest this? Look at the big bungalows and big cars around you. If we look at any big city, it would have lakhs of people with annual income of more than 10 lakh. Do you not feel, that for the good of the country, this movement for honesty, needs to be further strengthened?," he said.

In an apparent reference to seizure of new bank notes from bank officials and government servants, he said it is a bitter truth that people have complaints of bad experiences at the hands of Government machinery, and some government officers.

He said world over terrorism, naxalism, Maoism, counterfeit currency trade, drug trade, human trafficking depend on black money. "These evils have become a festering sore on society and Governments. Demonetisation has dealt a severe blow to these trades," he said.

The Prime Minister said so much of the cash in circulation has been deposited in the banking system indicated the success of this mission.

Lauding the efforts of bank employees in dealing with long queues post demonetisation and long hours of work, he acknowledged that some grave crimes by some officers in some banks have come to light.

"Some Government officers have also committed serious offences, and tried to take advantage of the situation. They will not be spared," he said.

He appealed to the bank flush with currency to move beyond their traditional priorities, and keep the poor, the lower middle class, and the middle class at the focus of their activities. Talking of the farm sector, Modi said an impression was sought to be created that the agriculture sector has been destroyed.

"Farmers themselves have given a fitting reply to those who were doing so. Rabi sowing is up by 6 per cent compared to last year. Fertiliser offtake is up by 9 per cent.

"During this period, the Government has taken care to ensure that farmers do not suffer for want of access to seeds, fertilisers and credit," he said.

The Government, he said, has decided to give RuPay debit cards within three months to the 3 crore farmers currently having Kisan Credit Cards.

Modi said the government decision to underwrite loans of upto Rs 2 crore instead of previous Rs 1 crore for small businesses will enable better access to credit for small shop-owners and small enterprises.

Government has also asked banks to raise the credit limit for small industry from 20 per cent of turnover to 25 per cent.

Also, banks have been asked to increase working capital loans from 20 per cent of turnover to 30 per cent, for enterprises that transact digitally. "Many people connected with this sector have made cash deposits in the last few weeks. Banks have been asked to take this into account when deciding on working capital," he aid.

To boost digital payments, tax liability of business with turnover of upto Rs 2 crore will be reduced by 25 per cent to the extent they do digital transactions.

Addressing political parties, the Prime Minister said electoral funding figures prominently in any debate on corruption and black money. "The time has now come that all political leaders and parties respect the feelings of the nation's honest citizens, and understand the anger of the people. It is true that from time to time, political parties have made constructive efforts to improve the system," he said.

He urged parties and their leaders to move away from "a 'holier than thou approach' to come together in prioritising transparency, and take firm steps to free politics of black money and corruption."

Modi also called for a debate on holding simultaneous conduct of state and national elections. "This is to break the endless cycle of elections, reduce election expenditure, and minimise pressure on the administrative machinery. The time has come for this to be seriously considered and debated," he said.

He said the nation cannot allow the fight against black money and corruption to stop or slow down.