Demonitisation and its effects on Rural and Farming Community in India
Our Indian Government’s announcement to the withdrawal of legal tender character of existing Rs.500/- and Rs.1000/- denomination banknotes from November 08, 2016. This is the third time higher denomination notes were demonetized. Previously, in 1946 first demonetization of Rs.1000/- and Rs.10000/- denomination notes. Later in 1954, Rs.1000/-, Rs.5000/- and Rs.10000/- were reintroduced into circulation and all of them were demonetised again in 1978. Rs.500/- note came to circulation in October 1987 and Rs.1000/- note made a comeback in November 2000. However, this is the first time that Rs.2000/- denomination notes being introduced.
The withdrawal limits were restricted by RBI on demonetization, which hit the economy into a serious liquidity crunch. It adversely affected the farming community and rural sector because of poor implementation of the scheme and inadequate number of banks, ATMs and poor internet connectivity in rural areas. Agriculture in India is the core sector for food security, nutrition security and important means of poverty alleviation in rural India. As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 16.1 per cent of the Gross Value Added (GVA) during 2014–15 at 2011–12 prices. More than 65% of India’s population depend on cash only. An important impact of demonetisation is likely to be on crop production in the Rabi(Winter) season. Farmers buy seeds, fertilisers and farm equipment in cash, pay their workers in cash, and wholesalers, traders and commission agents pay farmers in cash. The shortage of cash is gives discomfort to the people.
If sowing delayed, crops will be harvested in late march/april which affects rabi crop’s productivity and farm income will be in great question. Falling Vegetable prices have already eaten the farmer's profit. Onions sold for just Rs.1 per kilogram in wholesale markets at Madhya Pradesh’s Neemuch and Mandsaur, while tomatoes cost less than Rs.2/kg in Andhra Pradesh and Chandigarh. A kilogram of cauliflower fetched farmers just Rs.3/- in Bihar and potatoes cost Rs.3/- to Rs.5/- per kilogram in wholesale markets in Uttar Pradesh. The prices have fallen because the traders have stopped buying produce. The traders aren’t buying because most farmers aren’t accepting the old notes vice versa.
Around 80 percent of India’s workforce includes workers in small and medium industries, grocers, roadside vendors, barbers, maids, and others. The purchasing power of the people drastically reduced which struggled the rural population. Daily wage workers didn’t get their wages properly. Lack of knowledge in the digital payments is the major disadvantage and they were forced to do digital transactions. Average incomes of Indian agricultural households are extremely low, demonetization further deepen the crisis.
Recent digital initiatives offered by the central government to the farmers like Soil Health Card Scheme, National Agriculture Market (e-NAM), Kisan Suvidha Mobile app, Crop Insurance app and etc., showing the Information Technology intervention in agriculture. Co-operative societies at grassroot levels are reported in helping the farmers to tackle the situation. PM Modi’s New Year gifts like Crop loan waivers, interest subvention for housing and farming loans, replacement of Kisan credit card with rupay cards are timely intervention to reduce the burden.
- Sathees Kumar
(He is a graduate in sericulture. He is interested in Trekking and Adventure. Contact:satheesh8314@gmail.com)
No comments:
Post a Comment