CHANDIGARH: Demonetisation has been a double whammy for Punjab. The state government's revenue has fallen by almost 50 per cent and farmers are unable to buy fertilizers and seeds for the winter wheat crop.
The Punjab government's daily take by way of value-added tax [VAT], which used to be Rs 30-35 crore until November 8, has fallen to Rs 14 crore. Revenue from stamp duty, which used to be Rs 200-250 crore per day, has almost dried-up. There have hardly been any sales of property in the state since Nov. 8.
Excise duty, mainly by way of sale of liquor, too has dried up. Liquor vends across the state have not deposited any taxes this month. If the situation continues, Excise Department officials fear that the liquor contractors might not pay any fees at all and may even prefer to surrender their vends.
Liquor licence fee is paid by the 15th of every month in Punjab. A delay invites penal interest. There are 12,000 liquor vends in the state and the Excise Department earned Rs 5,440 crore in the last financial year in the form of excise duty.
Sources said the Punjab government has for the first time drawn twice the overdraft this month, using over Rs 2,050 crore beyond its limit. It has exhausted its ways and means advances (WMA) limit of Rs 925 crore.
On the farm front, despite the Union government asking NABARD to disburse Rs 21,000 crore to cash-starved cooperative banks throughout the country,
Punjab's 800 branches of cooperative banks are deserted as money has not reached them. Farmers in Punjab are unable to sow wheat as they are standing in long lines at commercial banks in order to deposit and withdraw money.
Many farmers have turned to private moneylenders to borrow money for seeds, fertilizers and pesticides.
One farmer in Gurdaspur, Bhagwant Singh, who owns around 18 acres of land, said, "The government has announceed that it has given Rs 21,000 crore to cooperative banks but nothing of it is seen on the ground. These banks have no money to give to us. Our crop credit limits are still standing and now we are paying interest on them to banks as we do not have money to pay back."
Another farmer, Avtar Singh said he bought seeds, fertilizers and pesticides on credit from a shopkeeper. "My money lying with me is now redundant as shopkeepers are not accepting Rs 500 notes for seeds and fertilizers. We can use old currency at government shops but they do not have stocks. This decision of the government has hit us badly."
Cooperative banks and agriculture societies are the backbone of farming in Punjab. Farmers have not been allowed to deposit their old currency now were they able to withdraw their money from such banks. And the sowing season is drawing to a close.