Doubling income is now a distant dream

The promised long-term benefits of demonetisation are not clear

of demonetisation on the rural economy is huge. Initially, the majority of the people supported the move because it was supposed to end the black economy. But as the government changes the narrative and the cash crunch starts to hurt, the support is wavering. Food inflation is down because consumers are buying less. Demand can be seen in two ways. One is deferred demand where consumers hold purchases of items like clothes due to financial crunch. But consumers not buying as many fruits and vegetables as they would normally buy is demand lost for farmers. They are paying the price every day. Prices of fruits and vegetables have crashed 25 per cent. Rabi season loan offtake is also impacted.

Additionally, the Reserve Bank of India (RBI), in its misplaced wisdom, notified that RBI-licensed cooperative banks will not accept RBI-issued currency bills. About 60 million farmers, who fulfilled the "know your customer" norms and availed themselves of loans under schemes such as Kisan Credit Cards, are unable to repay the loans simply because the banks are refusing to take back the RBI-issued currency.

"Doubling farmer income" seems a distant dream now. The prime minister appealed to the people to bear the "short-term pain". But the consequences to farmers are long-term. The government is unable to illuminate on the promised long-term benefits. It's not even explaining the term "long-term".

Jakhar is the chairperson of Bharat Krishak Samaj