Demonetisation | The story so far

Demonetisation disrupts rural and agrarian economy in Gujarat

The demonetisation of high value currency notes has apparently led to considerable disruption in rural and agrarian economy where cash-based dealings are a norm. A week after the announcement of the removal of existing currency notes of Rs. 1000 and Rs. 500, farmers and agriculture labourers are struggling on the streets to get cash to lead their day to day lives.

Majority of agriculture produce marketing committees (APMCs) are shut as hardly any trading is taking place because farmers have produce but have no buyers. Except perishable items like fruits and vegetables, no trading is happening for grains, groundnut and cottons in any place across Gujarat where there are 207 APMC.

"There is no trading in any APMC except perishable items like fruit and vegetables. There is no clarity also regarding when the trading will begin," said an officer bearer of Junagadh APMC. According to him, farmers don’t have money to even buy seeds or fertilizers and pay to labourers as new sowing season has begun.

On Wednesday, the Gujarat government announced that the farmers can buy fertilizers from the dealers and depo of Gujarat Narmada Valley Fertilizer and Chemicals (GNFC) and Gujarat State Fertilizers and Chemicals (GSFC) and also IFFCO.

"The issue is farmers are not used to deal in cash as less than five per cent farmers use cheque for making or receiving payments," said Veljibhai Patel, a farmer from Viramgam town near Ahmedabad.

"The rural economy has completely collapsed due to demonetization and also liquidity crunch. I want to sell cotton but there is no buyer in the APMC of cotton mill," said former Congress parliamentarian Virji Thummar, who is also chairman of Gujarat Congress Farmers cell.

The Gujarat government has requested the central government and Reserve Bank of India (RBI) to allow the district cooperative banks to accept deposit and exchange of old notes which has been prohibited by the RBI fearing large scale money laundering.

In Gujarat, there are 18 district cooperative banks which have more than 1000 branches catering to millions of farmers.

According to a senior leader of the ruling party BJP in Gujarat, if the situation does not improve by next week, there will be many issues. "So far, despite problems, public has cooperated but you cannot rule out problems if the situation persists for a few more days," he cautioned.

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Printable version | Jan 19, 2022 7:52:27 AM |

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