Withdrawal of Rs 2,000 notes won't affect common man, says former Chief Economic Advisor Krishnamurthy Subramanian

He explained that the Rs 2,000 notes are not widely used in everyday transactions, and they constitute only 10 percent of the total cash in circulation, news agency ANI reported.

The Reserve Bank of India (RBI) on Friday said that the Rs 2,000 notes will be withdrawn from circulation, and people will have the option to exchange or deposit the notes in their bank accounts by September 30. Beginning May 23, the RBI's regional offices and other banks will start accepting Rs 2,000 notes in exchange for lower denomination currency. Despite the withdrawal, the Rs 2,000 notes will continue to be recognized as legal tender.

Subramanian stated that most of the common people do digital transactions, which is another reason why the scrapping of the Rs 2,000 note wouldn’t affect ordinary citizens.

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

"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."

Referring to a report from BCG, the former CEA said as much as USD 3 trillion of transactions take place digitally.

"The report added that 65 percent of all transactions, or two of every three transactions, in terms of value, are expected to be digital by 2026," he was quoted as saying by ANI.

"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 the society," he said.