Indian Prime Minister Narendra Modi. Photo: Reuters
Indian Prime Minister Narendra Modi. Photo: Reuters

India’s poor, farmers, small entrepreneurs, pregnant women and old people had reasons to cheer for New Year as Prime Minister Narendra Modi announced incentives for them to build homes, avail of loans and maternity benefits and save more.

In his New Year’s Eve address to the nation, Modi hailed honest taxpayers but rounded on dodgers and bank officials who helped them in laundering money to defeat the government’s demonetization exercise which began in early November.

His 45-minute speech did not touch on how much money has returned to banks after the withdrawal of large-denomination notes, nor how long it will take for cash supply to return to normal.

While Modi’s supporters viewed the speech as a balm to heal wounds caused by the note ban, critics saw it as a ploy by the ruling BJP to win upcoming elections in Uttar Pradesh, Uttarakhand and Punjab.

West Bengal Chief Minister Mamata Banerjee said Modi failed to keep his promises.

“The PM, who runs the nation in the name of ‘shuddhikaran’ [cleansing], just underwent ‘buddhiharan.’ [losing one’s mind].”

It was more like a pre-budget speech. Modi made the announcements like a finance minister by deviating from the note ban agenda, she said.

Congress party spokesman Randeep Surjewala said PM’s speech was insensitive and disappointing. He did not apologize to people for the pain inflicted on them by demonetization. No mention, for example, of those who collapsed and died while standing in queues,Surjewala said.

Modi began his speech by saluting the people for their patience and sacrifices in the fight against corruption, which he said was choking the nation and stifling growth.

Over the past 50 days, the nation had undertaken a “shuddh yagna” [cleansing ritual] to put an end to the parallel economy, he said. All roads will be closed to the dishonest and corrupt who will be identified and punished, he said.

Modi said it is shocking only 240,000 taxpayers have a declared income of Rs100,000 (about US$1,400).

“Either you will laugh or you will get very angry on hearing this … Can any citizen digest this fact? How long can we keep turning away from such truths,” he said.

Parties and their leaders must be more open on political funding. Ideally, state and national elections should be conducted simultaneously to reduce election spending and pressure on the administrative machinery, he said.

Banks should serve the poor, farmers and small entrepreneurs better. This is now possible as they have received a large amount as deposits due to the note ban. The government is making efforts to bring banking operations back to normal, Modi said without indicating when curbs on cash withdrawals will be lifted.

Opposition leaders and economic experts, who were following Modi’s speech, were disappointed by his switch to the political narrative instead of saying how much laundered money has come to banks as deposits.

Minister of Commerce and Industry Nirmala Sitharaman later told reporters that India’s central bank is yet to release the final numbers related to demonetization. The fight against money laundering wasn’t over, she said. The government will use technology and digital means to monitor doubtful cash transactions, she said.

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