In general, Dr. Krishnamurthy Subramanian, who served as the government’s chief economist from 2018 to 2021, thought the decision to withdraw the 2,000 note was a sensible one. In his tweet, Dr. Subramanian outlined reasons why the change is crucial, including the fact that as the denomination’s use has dropped, it is now mostly used to keep cash.
RBI's decision to withdraw ₹2000 notes is important because:
(1) The move will help to ferret out a substantive part of the ₹3.6 lakh crores of Currency In Circulation (CiC) in ₹2000 notes currently (refer to the circular below, esp. the highlighted portion). As we have seen… pic.twitter.com/B4uNGCSlkr
— Dr. Krishnamurthy Subramanian (@SubramanianKri) May 19, 2023
2,000 rupee notes will no longer be in circulation, the Reserve Bank of India declared on Friday, setting off a political backlash. When the 500 and 1,000 note denominations were discontinued in November 2016, the 2,000 note was issued.