Government of India & Reserve Bank of India announced on Monday that farmers can now use old Rs. 500 notes to buy seeds. The decision came after government`s review of the situation post demonetization. Situation and long queues are coming to normal in banks and ATM`s but all the cash based businesses are severally impacted and continue to suffer. Keeping upcoming Rabi sowing season in mind government now announced use of old Rs 500 notes for purchasing seeds and fertilizers. This decision brings relief to the farmers and helps them prepare for the Rabi sowing. These old notes are allowed only at center and state government run seed/fertilizer enterprises and public undertakings. Government also extended the cash withdraw limit for farmers to Rs. 25,000 per week earlier. Farmers need to provide person identification while purchasing seeds and fertilizers.
Post demonetization government came under huge criticism from all the opposition parties with demand to rollback the decision since agriculture, agro-businesses are worst hit by the decision. Farmers were hit on both the sides, on the on hand no one is buying their produce due to cash crunch and hence they don’t have money to buy new seeds.
The cash withdrawal limits are also relaxed for small businesses said Reserve Bank of India. They can now withdraw upto Rs. 50,000 from their overdraft and cash-credit accounts every week provided the accounts are active for last three months. The facility was allowed only for current accounts of traders post note ban decision.