Farmers can buy seeds with old Rs 500 notes
To further support farmers for the current rabi crop, the government has decided to allow them to purchase seeds with the now demonetised Rs 500 notes.
The seeds can be bought from units belonging to Central or state governments, Public Sector Undertakings (PSUs), National or State Seeds Corporations, Central or state agricultural universities and the Indian Council of Agricultural Research (ICAR) on production of proof of identity.
This is in addition to the decision taken earlier for making cash available to the farmers by permitting them to draw up to Rs.25,000 per week from their KYC compliant accounts subject to the normal loan limits.
“The government is committed to ensure that the farmers are suitably facilitated during the rabi season,” the official statement from the government said.
Last week, the Finance Ministry had turned down the request of the Agriculture Ministry to permit farmers to purchase seeds using demonetised currencies of Rs 500 and Rs 1,000.
The Finance Ministry had cited the surge of deposits in Jan Dhan accounts to counter agriculture ministry’s request for allowing demonetised currencies for seed purchase. It argued that this may become a conduit to offload black money.
The Reserve Bank of India, earlier in the last week, had banned District Central Co-operative banks from accepting old currency which had hit farmers, who were looking to pay off their crop loan dues with the now-defunct Rs 500 and Rs 1000 notes.