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Note Ban May Lead to Temporary Economic Slowdown, Says President

A file image of President Pranab Mukherjee. (Photo: PTI)

New Delhi: The President of India, Pranab Mukherjee, on Thursday said that demonetisation may lead to a temporary slowdown of the economy and that the suffering of the poor will have to be alleviated.

“Demonetisation, while immobilizing black money and fighting corruption, may lead to temporary slowdown of the economy. We all will have to be extra careful to alleviate the suffering of the poor which might become unavoidable for the expected progress in the long term,” Mukherjee said in a speech to Governors and Lt. Governors.

“They need to get succour here and now. The recent package announced by the Prime Minister will provide some relief,” Mukherjee added.

In a televised speech on December 31, Prime Minister Narendra Modi announced a limited interest waiver for farmers and rebates on housing loans, besides sops for senior citizens.

The farm sector, which has been hit hard by the note ban, seems to be the biggest beneficiary. The PM said three crore Kisan credit cards to be converted to Rupay cards in next three months, which can be used anywhere.

For loans taken from district cooperative banks and primary societies for kharif and rabi, interest of 60 days will be cut and deposited to the account of the farmers.

Modi also announced that the government will build 33% more houses than originally envisaged under the Prime Minister Awas Yojana. Modi said that for loans under the PMAY, there will be a 4% rebate on interest for 9 lakh rupee loan while loans worth Rs 12 lakh will get a 3% rebate.

Fifty days after demonetisation, it is learnt that almost 97% of the Rs 15.4 lakh crore invalidated is back in the banking system, Bloomberg News reported, citing government sources it didn’t identify.