No Observable Impact On Economy: Arvind Panagariya On Rs 2,000 Note Withdrawal

Former NITI Aayog Vice Chairman Arvind Panagariya, said the RBI's plan to remove Rs 2,000 currency notes from circulation won't have a "perceptible effect" on the economy because any such notes returned will be replaced by either equivalent cash in lesser denomination notes or a deposit.

Panagariya added that the intention behind this action is probably to make it harder for illegal funds to be moved around.

The economy won't experience any noticeable changes. Any Rs 2,000 notes that are returned will be exchanged for an equivalent amount of cash in lesser denomination notes or a deposit. Therefore, the money supply won't be affected, he told PTI.

The famous economist responded that many citizens likely do not have Rs 2,000 notes because few transactions involve those notes when asked whether the public will experience any inconveniences as a result of this decision.

For those who comply, the only hassle will be an additional trip to the bank. Even that can be avoided by swapping Rs 2,000 notes at the bank when you go there for another transaction, he added.