The government on Monday announced that farmers can now buy seeds using older denomination notes of Rs 500 and Rs 1,000 that were recently demonetised by the Centre to curb the menace of black money. It also accepted the Maharashtra government's request to allow farmers to buy Rabi seeds using Rs 500 and Rs 1,000 currency notes.
Farmers have now been allowed to use demonetised currency notes to buy seeds from the centres, units or outlets belonging to the central or state governments, public sector undertakings, national or state seeds corporations, central or state agricultural universities and the Indian Council of Agricultural Research (ICAR). However, they will have to give an ID proof, the finance ministry said in a statement.
"The government is committed to ensure that farmers are suitably facilitated during the Rabi season," the statement said.
With the Rabi season all set to begin, Prime Minister Narendra Modi's decision to demonetise currency notes of Rs 500 and Rs 1,000 had affected the farmers since the agriculture sector is entirely dependent on cash.
Demonetisation made it impossible for farmers to pay farm hands, which were a threat to the production of key commodities, the Indian Express reported. Daily wage labourers were also unable to earn their living while no one was willing to accept the old notes as far as food rations were concerned.
The finance ministry had, a few day ago, allowed farmers to withdraw cash up to Rs 25,000 per week against sanctioned crop loans. The deadline for payment of crop insurance premium was also extended by 15 days while APMC-registered traders were allowed to withdraw up to Rs 50,000 per week.
The Reserve Bank of India (RBI) on Monday said that overdraft and cash credit account holders were now allowed to withdraw up to Rs 50,000 per week. Previously, only current account holders were allowed to withdraw up to Rs 50,000 in cash per week. the accounts have to be operational for at least three months or more.
The limit does not apply to holders of personal overdraft accounts.
The RBI added that withdrawals of Rs 50,000 may be disbursed predominantly in the new Rs 2,000 currency notes.