Wednesday, April 24, 2024

Impact of Rs 2,000 Notes Withdrawal Marginal on Economy: Shaktikanta Das

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In a recent address, Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), stated that the withdrawal of Rs 2,000 notes would have a marginal impact on the economy. Das’ remarks came amidst discussions surrounding the potential demonetization of high-value currency notes in an effort to curb corruption and promote digital transactions.

Highlighting the limited significance of removing the Rs 2,000 denomination from circulation, Das emphasized that the majority of transactions in the country were already being conducted through digital platforms. He further asserted that the currency withdrawal would not disrupt the functioning of the economy or cause any major upheaval.

The decision to introduce the Rs 2,000 note was made in 2016 as part of the demonetization exercise aimed at combating the parallel economy and counterfeit currency. However, concerns have since been raised regarding the possible misuse of the high-value denomination for illicit activities. Therefore, the proposal to withdraw these notes gained traction, with proponents arguing that it would promote a more transparent and accountable financial system.

Das, however, pointed out that the current currency structure in India is well-diversified and consists of various denominations. He underlined the resilience of the economy and reassured the public that the withdrawal of Rs 2,000 notes would not disrupt day-to-day transactions.

Furthermore, the Governor highlighted the positive impact of digital payment systems, which have gained popularity in recent years. With the advancement of technology and the increasing availability of smartphones, a significant portion of transactions is already being conducted electronically, reducing the reliance on physical currency.

While the withdrawal of Rs 2,000 notes may not lead to a drastic transformation of the economy, it symbolizes a continuous effort by the authorities to streamline the financial system and foster a culture of transparency and accountability.

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