Farmers can buy seeds with old Rs 500 notes

Farmers can buy seeds with demonetised Rs 500 notes, the government announced on Monday.

They can produce proof of identity and make their purchases at central and state government outlets, PSUs, national and state seeds corporations, state agriculture universities and the Indian Council of Agricultural Research.

The relaxed rules will stay in force for the entire rabi season.

The government also asked banks to make available funds for farmers through co-operative banks.

The announcement came after Finance Minister Arun Jaitley met officials of the Reserve Bank of India, Nabard and public sector banks, and discussed ways to ease the cash distress in rural areas.

“The only item for discussion was… with regard to transfer of resources to the rural areas,” Jaitley said, emerging out of a late evening meeting.

“Nabard has given the details of immediate requirements and it’s been decided that banks with whom the cooperatives are associated will make the resource available straightaway,” Jaitley told reporters.

The latest relaxations come close on the heels of the government allowing farmers to make cash withdrawals of up to Rs 25,000 a week against sanctioned crop loans.

The government is committed to ensuring that the farmers are suitably facilitated during the rabi season, a statement from the Finance Ministry said.