Agri Ministry withdraws report from Parliamentary panel on impact of note ban on farmers

The Agriculture Ministry has withdrawn from the Parliamentary Standing Committee on Finance its report that suggested the government's shock decision to demonetise old Rs 500/1,000 notes in November 2016 affected farmers' community, according to some committee members.

A panel chaired by senior Congress leader M Veerappa Moily had met Tuesday where RBI governor Urjit Patel had made a presentation on the state of the economy.

Some members on the panel belonging to opposition parties said that the ministry had on November 20 presented a report before the panel saying farmers had to face difficulties in purchase of seeds and fertilisers due to demonetisation.

But the ministry has apparently withdrawn its November 20 report and has now presented a new one before the panel, the opposition members said.

The new report has stated that there was no impact of demonetisation on farmers, they added.

On November 23, Agriculture Minister Radha Mohan Singh had denied claims that demonetisation prevented farmers from purchasing seeds.

"There was no ban on purchase of seeds with the (scrapped) Rs 1,000 and Rs 500 notes. In the year before demonetisation, 308 lakh tonnes of seed was bought by farmers, while it reached 348 lakh tonnes during the year in which demonetisation was implemented," Singh had said.

Meanwhile, criticizing Prime Minister's Narendra Modi's demonetization decision, former chief economic advisor Arvind Subramanian had said that note-ban was a massive, draconian, monetary shock that accelerated economic slide to 6.8 per cent in the seven quarters.

Signalling that he was sceptical of the decision, he added that he did not have a strongly-backed empirical view apart from the fact that the welfare costs, especially on the informal sector, were substantial.

An IANS report quoted Subramanian as saying, "Demonetization was a massive, draconian, monetary shock: In one fell swoop, 86 per cent of the currency in circulation was withdrawn. The real GDP growth was affected by the demonetisation. Growth had been slowing even before, but after demonetisation, the slide accelerated."