TN govt breaks silence on demonetisation, says crop loans & co-op banks hit

TN govt breaks silence on demonetisation, says crop loans & co-op banks hit

Tamil Nadu government has that 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.

The Tamil Nadu government charged on Wednesday 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.

The government was “unable to give new loans to farmers for samba cultivation, which forms the major proportion of food production in Tamil Nadu,” an official release stated, adding that a review meeting was chaired by Cooperation Minister Sellur K. Raju in the Secretariat to discuss the situation.

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.

Supply of fertilizers and seeds in all the 4,474 primary agricultural co-operative credit societies has been affected and other services like issuance of birth and death certificates have been severely affected leading to loss of revenue.

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.