“The situation is normalising in the urban areas. In the next few days, the focus will be on the rural areas so that farmers have enough funds because it is rabi sowing season.
Few decisions were taken yesterday night which will be made public today,” Finance Minister Arun Jaitley said while addressing the BJP MPs in a parliamentary party meeting here.
The Minister said the credit flow from banks would also go up for various activities including agriculture as huge amount of cash due to demonetisation was deposited in the banking system.
Emphasising that demonetisation had a direct relation with the poor, with poverty and with poverty alleviation, Jaitley said this move (of demonetisation) could result in huge jump of public spending in rural areas especially for poverty alleviation.
Assuring that once this remonetisation or the process to provide alternative currency reaches reasonable level, he said the government would ease all restrictions but till then there would be difficulty for some time.
The Minister said the currency cannot be released all of a sudden, it will be done in a calibrated way and for that the focus was primarily on rural areas.
“The remonetisation is being done in a calibrated way for coming weeks. The focus is only on rural areas,” he added.
Yesterday, the Finance Ministry had permitted the farmers to use old Rs 500 notes for purchasing seeds from any state or central government outlets and agri universities.
The government has already permitted the farmers to draw up to Rs 25,000 per week from their KYC compliant accounts subject to the normal loan limits and conditions apart from the other facilities announced last week.
Besides, the government had already extended the deadline for payment of crop insurance premium by 15 days and permitted APMC-registered traders to withdraw up to Rs 50,000 per week.
Meanwhile, Jaitley said that India was working on a framework to check flow of illicit money routed through Singapore.
He said that after revising the tax treaty with Mauritius and Cyprus to check flow of illicit cash, India was in talks with Singapore also.
PTI