Millions Of Farmers Were Severely Affected By Demonetisation, Admits Agriculture Ministry

On the eve of November 8, Prime Minister Modi in an unprecedented move announced Demonetisation, banning notes of Rs 1000 and Rs 500, which constituted 86 per cent of Indian currency. The NDA-led government called the move necessary and claimed that it would help the country by destroying the black money and counterfeit note in circulation.

However, two-years-later a report by the Union agriculture ministry has admitted that the PM’s highly proclaimed move had severely affected the farmers.

Farmers badly hit

According to The Hindu, the Union Agriculture Ministry in the report submitted to the Parliamentary Standing Committee on Finance stated that millions of farmers in the country were affected by the implementation of demonetisation in 2016, as they were unable to buy seeds and fertilisers for the winter crops.

The Parliamentary Standing Committee on Finance, headed by Congress MP Veerappa Moily, on Tuesday was told that demonetisation was launched at the time when the farmers in the country were busy in either selling their Kharif crops (Autumn crops) or sowing the Rabi crops (Spring harvest). The report said that both these operations require a huge amount of money but during that time, the farmers’ either didn’t have cash or if there was cash(demonetised money), it was useless. In the meeting, the Union ministry acknowledged that demonetisation made all the cash that the farmers had in their hand useless affecting their sale and purchase drastically.

Stating that the move was problematic for both small and big farmers. The report pointed out that India’s 263 million farmers live mostly in the cash economy. It further added that “Millions of farmers were unable to get enough cash to buy seeds and fertilisers for their winter crops. Even bigger landlords faced problem such as paying daily wages to the farmers and purchasing agriculture needs for growing crops,” as reported by The Hindu.

Opposition questioned the government

The report also mentioned that even the National Seeds Corporation (NSC) had to face challenges, as it failed to sell nearly 1.38 lakh quintals of wheat seeds because of the cash crunch in the market. Subsequently, the government allowed the use of old currency notes of Rs 500 and Rs 1,000 for the purchase of the wheat seeds. However, it was too late, the approval to use demonetised currency did not also help in increasing the sale.

Dinesh Trivedi member of All India Trinamool Congress’ questioned the government about the job lost post demonetisation. He said that if the government is aware of a report by the Centre for Monitoring Indian Economy (CMIE). The CMIE in its report has stated that 1.5 million jobs were lost during January-April 2017 post demonetisation.

Meanwhile, the Labour Ministry has praised demonetisation in its report. The Ministry said it there was an increase in the employment data in the subsequent quarter.

In the past two years, the BJP government has maintained that demonetisation was a successful exercise even when there were multiple reports pointing out it didn’t achieve its purpose. However, at the recent rally in Jhabua, Madhya Pradesh, PM Modi. He claimed that he has used the “bitter medicine” of demonetisation to bring back money into the banking system and to give “proper treatment to deep-rooted corruption system” in the country.

Also Read: 99.3% Of Demonetised Currency Back In System: RBI Report