CHENNAI: In the first official comment since the shock announcement of demonetisation of Rs 500 and Rs 1,000 currency notes, the Tamil Nadu government charged on Thursday that the functioning of the primary agricultural cooperative credit societies and district central cooperative banks in the State had come to a standstill due to demonetisation, which has seriously affected farmers.
Asked whether the issue would be brought to the notice of the Centre, official sources said, “We have reviewed the prevailing situation. The State government is yet to take a call on the next move.” Efforts to reach Minister for Cooperation ‘Sellur’ K Raju for his comments on the issue failed.
The minister reviewed the impact of the demonetisation on the cooperation department during the day, when officials said farmers could not repay their crop loans, while the cooperative societies are unable to receive new deposits from the customers.
Besides, the collection of other loans extended by the primary agricultural cooperative credit societies had also been affected by demonetisation exercise.
This, the officials warned, will have a huge impact on farmers who are desperately in need of fresh crop loans, as it is coming at a time when samba season has begun.
During the past five and half years, Rs 910 crore was given as interest subsidy to those farmers who had repaid their loans on time, and Rs 200 crore has been allocated for this in the current financial year. However, extending interest subsidy to farmers also had been affected now.
Due to the demonetisation, the target fixed (Rs 6,000 crore) for crop loans during the current financial year could not be achieved since November 7, the day of the announcement, only Rs 2,075.41 crore had been given to 2,28,612 farmers. Ultimately, this would affect the overall production of foodgrains in Tamil Nadu.
Further, following the notification issued by the Reserve Bank of India on November 14, the Central cooperative banks are unable to carry out any money transaction.
Due to this, the 23 district central cooperative banks that have 813 branches and lakhs of customers have been severely affected by demonetisation exercise.
An official release here said a large number of rural population deposited their money in the primary agricultural cooperative societies and in prevailing situation caused by the demonetisation exercise, the rural people could not deposit Rs 500 and Rs 1,000 notes in cooperative banks. The demonetisation exercise has affected the commercial growth of these banks while farmers have also been put to great hardship.
At present, 4,474 primary agricultural cooperative societies could not supply fertiliser and seeds to the farmers. Further, collection of crop insurance from farmers, issue of community certificates, birth and death certificates and other essential services have been affected.The review meeting was attended by Food, Cooperation Secretary Pradeep Yadav, Registrar of Cooperative Societies A Gnanasekaran and other senior officials.