*Mehjabeen & **Saravanadurai A
*Research Scholar, Department of Economics, Periyar University, Salem, Tamilnadu, India.
**Associate Professor, Department of Economics, Periyar University, Salem, Tamilnadu, India.
The demonetization in India was a cardiac arrest which leads to cash crunch in almost all the sectors inclusive of the Agriculture Sector. The growth rate in the sector tightened to 0.2% in 2014-15 and grew not more than 1.2% in 2015-16 mostly because of continuous drought. It’s affecting various sectors, especially agriculture. Farmers and small vendors faced many problems. The seasons like Rabbi and Kharif are suffering through a cash crunch. Demonetization shadowed over the agriculture sector through Indirect taxes by making an impact on wholesalers and farmers. Farmers weren’t able to buy seeds, fertilizers, agriculture equipment’s by cash as their cash was locked in the banks and the cash in hand was having no use unless it is exchanged with the new currency. The Indian farmers are not used to smartphones and digital technologies as most of them just use their phone for making phone calls. They faced trouble to do their transaction using apps such as Paytm, phone pay etc. The bank interest rates dropped which, reduced the capital cost that in turn led to farm mechanization. Cash crunch made some horticulture farmers’ lives pathetic as onion prices touched the peak. Agricultural growth in India contracted 0.2% in 2014-15 and grew not more than 1.2% in 2015‐16, largely because of back‐to‐back droughts.
agriculture, demonetization, kharif, rabbi, rural economy, horticulture.
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To cite this article
Mehjabeen, & Saravanadurai, A. (2020). Effect of Demonetization in Agriculture Sector. John Foundation Journal of EduSpark, 2(1), 10-18.