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, a State Bank of India report said on Tuesday.

"The overall fiscal impact of all these measures will be around Rs 3,500 crore per year," State Bank of India's (SBI) Ecowrap report read.

Modi announced 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, which will cost Rs 1,000 crore per year, the report said.

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.

Modi also announced a scheme for senior citizens, under which they will receive a fixed interest rate of 8 per cent for a period of 10 years on deposits up to Rs 7.5 lakh, and the interest amount can be paid monthly.
 

The report said that the senior citizens' scheme should be tweaked further to improve financial security.

"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.

The report further said that a maximum deposit limit should be Rs 15 lakh, instead of the proposed Rs 7.5 lakh.

"On the basis of Rs 7.5 lakh deposits, the monthly interest payout will be around Rs 6,000, which may be a negligible amount to manage the day-to-day activities," it added.