Days after allowing farmers to make cash withdrawals up to Rs 25,000 per week against sanctioned crop loans, the Centre on Monday announced that they will now be allowed to use old high denomination notes for purchasing seeds. Farmers can now use old Rs 500 notes at state-owned outlets towards the purchase of seeds, the Finance Ministry said in a statement.
With the onset of winter, farmers were gearing for the Rabi season. However, Prime Minister Narendra Modi’s November 8 announcement has taken a toll on rural population as the agriculture sector is entirely cash-dependent. Cash crunch meant that farmers had no money to pay farm hands, threatening production of key commodities. With food rations dwindling and no takers for old Rs 500 and Rs 1000 notes, daily-wage earners also struggled to make ends meet.
West Bengal Chief Minsiter Mamata Banerjee, who is trying to stitch up a rainbow coalition against demonetisation, asked the Centre to come up with a proper plan of action instead of “announcing new changes” everyday. “The lower middle class, traders, daily wagers, housewives are the worst sufferers,” she said.
Meanwhile, the Reserve Bank relaxed norms on cash withdrawals. It said that overdraft and cash credit account holders can now withdraw up to Rs 50,000 in a week. Earlier, current account holders were allowed to withdraw up to Rs 50,000 in cash, in a week. “On a review, it has been decided to extend this facility to Overdraft and Cash Credit accounts also,” the central bank said.
Accordingly, holders of current/overdraft/cash credit accounts, which are operational for the last three months or more, may now withdraw upto Rs 50,000 in cash, in a week. However, this enhanced limit for weekly withdrawal is not applicable for personal overdraft accounts. The Reserve Bank further said the Rs 50,000 withdrawals may be disbursed predominantly in Rs 2,000 denomination bank notes.
With PTI inputs