Government provides relief to farmers, marriage parties, reduces exchange of illegal tender to Rs.2,000
NEW DELHI: Continuing to play it by the ear, the Narendra Modi government announced several more decisions to manage the fallout of the demonetisation of high-value currency notes. Here are today's decisions:
1. The maximum amount of old money you can exchange for new currency has been cut from to Rs 4500 per day to Rs 2000 per day.
2. Additionally, farmers are now allowed to up to withdraw Rs 25,000 per week against their crop loan from banks.
3. However, traders registered with the Agricultural Produce Marketing Committees [APMCs] can withdraw Rs 50,000 per week.
4. Families that have marriages coming up can withdraw a maximum of Rs. 2.5 Lakh from their bank accounts -- if they are compliant with know your customer [KYC] norms. The option is open to one member of the family on the bridegroom's side and one from the bride's side.
5. Central government employees up to group C, and staff of the railways and central paramilitary forces can take a salary advance of up to Rs 10,000 in cash.
Announcing these measures on Thursday, economic affairs secretary Shaktikanta Das said they are meant to help farmers purchase seed for sowing during the rabi season and to buy fertilizer and other inputs.
Economists were sceptical whether these measures will work. Agronomist Vijay Sardana said, "It is not clear how these measures will help farmers. The amount announced for purchasing seeds is OK but then farmers are unable to sell their produce as traders are insisting on paying them with old Rs 500 and Rs 1000 currency notes."
He said APMC traders are hoarding the new currency. “It is important that government sees to it that payments are made to farmers,” said Sardana.
The government’s concession to families with marriage plans has also not gone down well with sociologists and economists. “The lavish spending by Gali Janardhan Reddy for his daughter's wedding was glaringly evident to commoners and it's unlikely that the minor concessions given to ordinary people will go down well,” said sociologist Shiv Vishwanathan.
Economists feel that the advance payments announced for government employees are unlikely to ease the pressure on the economy. “These people have already taken credit from their milkman and grocer. The advance will be used to pay those bills and it is not going to be easy to withdraw that money,” said Sardana.