NEW DELHI: Prime Minister Narendra Modi's announcements on the New Year's Eve, including sops in housing, agriculture and for pregnant women, will cost the economy a total of over Rs 3,500 crore annually as the government will have to make an additional budgetary provision to pay for the slew of welfare measures.

As per the State Bank of India's (SBI) research report, “The overall fiscal impact of all these measures announced by the PM on December 31, will be around Rs 3,500 crore per year, which is minimal compared to the social and economic benefits.”

"The overall fiscal impact of all these measures will be around Rs 3,500 crore per year," SBI Ecowrap report read.

"Though the scheme is laudable, it may be tweaked further. The lock-in period of 10 years is quite a long span of time in the case of senior citizens, given the life expectancy of around 68 years in India. We suggest that the lock-in period should be at most five years rather than 10 years," the report stated.

"The rate of interest should be a minimum of 8 per cent or whatsoever prevailing in the market with a defined upper bound," it suggested.

HOW AND WHERE BUDGET TO BE DISTRIBUTED

• Two housing schemes in urban areas for persons of economically weaker section (EWS) or low income group (LIG) with income up to Rs 6 lakh will cost Rs 1,000 crore per year.
• The scheme for financial assistance to pregnant women, wherein Rs 6,000 will be transferred directly to the bank accounts of these women, will cost Rs 1,200 crore to the government.
• The relief measure for farmers, which will exempt the loans for Rabi crop from interest for a period of 60 days, will put a burden of Rs 1,300 crore on the government.

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