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The year back announcement of demonization by the Modi government has doubt started a resolution of clean-up in the country. But since it has come at such a crucial time for the farmers and rural citizen. It is likely to affect them more than anyone else. Farmers in India generally deal in cash, and this present period, which is the onset for the Rabi season, is created is lot of panic among them since farmers usually get only 15-20 days to plat their crops. Therefore, the cash crunch in rural India has to be sorted out pretty by the govt.
Keywords: Demonetisation and effect or impact on Agricultural sector
In televised addressed on Nov.08th Indian prime minster announced that to off India’s highest denomination currency bills – Rs 500, ; 1000 would no longer be recognised as legal tender. Over night the move rendered 86 % of the countries cash in circulation worthless. The announcement of demonetisation Rs 500 ; 1000 notes did not just catch the average citizens of guards it also surprised economic and political experts.
Overall immediate impact in rural areas is more negative than cities said Ravi Ramamurthy , director of centre of emerging markets an distinguished professor of international business strategies at north eastern university “rural areas rely on more on cash than modern methods of transacting like mobile wallet, credit or debit and therefore the impact is more”
Objectives of study:
1. To study demonetisation
2. To study impacts of demonetisation on agricultural sector
Research methodology:
The present study is based on secondary data the source of data include the fact revealed by Reserve Bank of India, central statistical office of India , journals and internet websites.
Demonetisation is a radical monetary step in which a currency units status a legal tender is declared invalid this is usually done whenever there is a change of national currency , replacing the old unit with new one. Concern to India it was not first move has been taken ,before that also the govt of India has gone for demonetisation of high value currency that was in 1946 by Reserve bank of India demonetised 10,000 notes and circulated rupees 1000,s notes . In the year 1978 shri Morarji Desai govt demonetised 1000, 5000 and 10000 rupees notes.
Reasons behind demonetisation
1. Black money
2. Fake currency and terrorism
3. Economic stability in near future
4. Election
5. Less cash economy
6. Unorganised trading
7. combat inflation
8. combat corruption and crime – dependent economy
History of Demonization in India
The first currency ban: in 1946, the currency notes of Rs. 1000 and Rs. 10000 were removed from circulation. The ban really did not have much impact, as the currency of such higher denomination was not accessible to the common people. However, both the notes were reintroduced in 1954 with an introduction of Rs. 5000 currency. Rs.500 and Rs. 1000 notes were introduce in 1934 and after four years in1938, Rs. 10000 notes were introduce.
The second: that came up in 1978; the then prime minister of India Morarji Desai announced the currency ban taking Rs. 1000, Rs. 5000 and Rs. 10,000 out of circulation. The sole aim of the ban was to curb black money generation in the country.
Similarities in 1978 and 2016 ban:
The notes ban by Morarji desai also aimed to drive away black money out of circulation in the economy. Hence the high denomination bank note Act was implemented.

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