Tamil Nadu government today said the Centre’s decision to demonetise old Rs 500 and Rs 1,000 notes would hit its crop loan target for the year and also severely affect the food production.
This has also ‘impaired’ the cooperative credit sector that caters to the farming community.
Cooperation Minister Sellur K Raju today held a review meeting to discuss the scenario, a state government release here said.
It said the RBI notification demonetising the high value notes has affected Primary Agriculture Cooperative Credit Societies and Central Cooperative Banks.
While farmers were “unable” to repay their loans on time, the societies were not able to receive new fixed deposits and were therefore ‘completely impaired’, it said, adding, they were also facing difficulties in receiving repayments on crop loans and other credits.
The societies were unable to disburse crop loans at a time when samba paddy crop was underway in Tamil Nadu, it said.
The Centre’s decision will particularly affect the department’s target of crop loan disbursal for the year, which was Rs 6,000 crore. As of November 7, 2016, Rs 2,075.41 crore has been disbursed to over 3.38 lakh farmers as against Rs 3,512.80 crore to over 6.38 lakh farmers last year during this time, it said.
