India Prime Minister Narendra Modi defended his move to ban high-denomination bank notes in a televised speech in which he announced incentives to help the poor, farmers, women and small businesses.
According to a report by Reuters, Modi made the televised speech last week in which he thanked Indians for hanging in with the currency moves. “In this fight against corruption and black money, it is clear that you would like to walk shoulder to shoulder with us [the government],” Modi said, according to the Reuters report. “For us in government, this is a blessing … Corruption, black money and counterfeit notes had become so rampant in India’s social fabric that even honest people were brought to their knees.”
In the address, Modi asked banks to step up and increase the rate at which they lend to the poor and announced additional measures, such as a 4 percent discount on interest rates for home loans taken out in 2017. The discount is on up to 900,000 rupees, or $13,200, Reuters noted. Modi also said credit guarantees for small businesses will be increased by the government, and it will offer more incentives for digital payments and transactions. Reuters noted some of the incentives also included helping pregnant women and senior citizens and more financial backing for farmers. Modi didn’t say how the incentives will be paid for.
In November, Modi announced the country’s 500-rupee and 1,000-rupee banknotes were being taken out of circulation. As reported by the BBC, taking those notes out of the financial system represented an effort to stymie fraud efforts, corruption and what the BBC noted as “illegal cash holdings.” Modi stated that the illegal activities are among the “biggest obstacles in eradicating poverty” — with a bead being drawn on tax evaders, according to the BBC. A new set of 500-rupee and 2,000-rupee notes are being issued as replacements. Banks had 50 days to comply with the new directive, with individuals able to exchange those notes beginning Nov. 10 and extending through Dec. 30.