Ex-chief economic advisor Subramanian on why withdrawal of Rs 2000 notes won't affect a common man

The Indian government's former Chief Economic Advisor Krishnamurthy Subramanian today (May 20) said that digital transactions and the low percentage of Rs 2,000 notes in circulation in the market will come as saviours, and a common man would not be affected much by the government's decision to withdraw Rs 2,000 notes.

Subramanian said that the common man won't be affected since only 10 per cent of currency notes in the market at present are of Rs 2,000 and people are less dependent on currency notes because of increasing digital transactions. 

"The 2,000 notes are not in use in the everyday lives of common people, and the cash in circulation is only 10 per cent," Subramanian told ANI.  

"Secondly, most common people do digital transactions."

He further said, "When a common man comes out to buy something, for example, 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, and the customer can do the transaction with Paytm and PhonePay right away." 

Citing further examples of his opinion on the withdrawal of notes, Subramanian says that when a person who delivers milk to the tea vendor in the morning comes to collect that money in the evening, both prefer digital transactions.

"In such a way, both parties don't have to go through this trouble now. They don't have to go through this because of digital transactions." 

Subramanian said such practises have made transactions easier for the common man.

He said that digital transactions have reached every part of the country and that more of them will be recorded in the future. 

Citing a BCG report, he said that as much as $3 trillion of digital transactions take place in the country in a day. 

"The report says that 65 per cent of all transactions, or two or three every transaction, in terms of value, are expected to be done digitally by 2026," he said, adding that digital transactions done by the common man will grow in the future.

"So, I think the 2,000 notes will not affect the common people of society," he said.