Rs 2000 note withdrawal will not affect common man: Ex-CEA Krishnamurthy Subramanian

The Reserve Bank of India's (RBI) decision to withdraw the Rs 2,000 note from circulation will not affect the common man, according to former Chief Economic Advisor Krishnamurthy Subramanian.

Subramanian, who had earlier defended the 2016 demonetisation, argued that since the Rs 2,000 notes are not in use in everyday life and the cash in circulation is only 10 per cent, the recent RBI move will not have a big impact on the common man. Further, he said that due to the increasing use of digital transactions, most will not feel the pinch either.

"When a common man comes out to buy something, for example, ordering tea from a chai vendor. While doing this, the tea vendor doesn't have to go through the pains of searching for change in his pocket or kitty, and the customer can do the transaction with Paytm and PhonePay right away," the former

CEA was quoted as saying.

Similarly, when the person who delivers milk to the tea vendor in the morning, comes to collect that money in the evening, "both parties don't have to go through this trouble now" because of digital transactions, he told the newswire agency.

And this, he said, has made it easier for the common people.

"Because of this, many difficulties will be reduced," he added. "Digital money is being used in every part of the country, and going forward, it will grow."

Citing a report conducted by Boston Consulting Group (BCG), Subramanian said as much as USD 3 trillion of transactions take place digitally.

"The report added that 65 per cent of all transactions, or two of every three transactions, in terms of value, are expected to be digital by 2026," he added.

"The digital transactions done by the common man will only grow, going forward. So, I think the 2000 notes will not affect the common people of society," he said.