INDIAN Prime Minister Narendra Modi announced a series of incentives for the poor, farmers, women and small businesses Saturday in a New Year’s address, and defended his recent decision to abolish high denomination bank notes.

    The televised speech was widely seen as an opportunity for Modi to shore up support after a radical move Nov. 8 to withdraw all 500 and 1,000 rupee bills, accounting for 86 percent of currency in circulation.

    Millions of Indians were forced to queue outside banks for hours to deposit old money and withdraw as much new currency as was permitted, causing widespread anger and raising concerns about India’s economic growth in the current quarter.

    The so-called “demonetization” was designed to crush India’s huge shadow economy, increase tax revenues and promote the use of bank accounts and digital transactions, but perceptions that the ambitious operation was botched have hurt Modi’s standing.

    Among the measures announced Saturday was an offer of a 4 percent discount on interest rates for home loans for up to 900,000 rupees (US$13,200) taken out in 2017 by middle class Indians.

    Modi also said the government would increase credit guarantees for small businesses and provided additional incentives for digital transactions.

    There were steps to help pregnant women and senior citizens, as well as financial support for farmers, an apparent bid to win backing among the huge rural population of Uttar Pradesh that has been hit hard by the cash overhaul.

    Modi did not say how the government would pay for the measures, although economists said the package was unlikely to be too costly. It was unveiled as the government gears up to announce its annual budget, probably some time in February.

    “It’s clear that Modi is chastened and he had no big bang offerings today,” said Mohan Guruswamy, chairman of the independent economic think-tank Centre for Policy Alternatives.

    “He is clearly doing this to win back political support.”

    The Uttar Pradesh poll will be a litmus test for Modi and his ruling Bharatiya Janata Party, and will go some way to determining the prime minister’s chances of winning a second term in office in national polls scheduled for 2019.

    While he has introduced several major reforms to Asia’s third largest economy, the cash ban is seen as his biggest political gamble to date.

    Members of the main opposition Congress party were quick to criticize the speech.

    One senior member, Prithviraj Chavan, said the address was vague and lacked accurate accounting details.

    “It was his day to present a report card and specifically disclose the benefits of ‘demonetization,’ but clearly the entire drive has been a failure,” he said.(SD-Agencies)