Demonetisation: India moving towards formal economy, says Amitabh Kant

The Niti Aayog CEO, termed the withdraw of old Rs 500 and 1,000 notes from circulation as 'excellent' and 'good' move

Backing the government's decision to demonetise higher-value currency notes, Niti Aayog Chief Executive Amitabh Kant today said the country is moving towards a totally digitised payment system that will accrue "huge gains" in the long-term for the economy.

"There are long-term gains for the country (from demonetisation). The country will move towards a totally digitised payment economy. It will move towards formalised economy," Kant told reporters on the sidelines of 'India Power Forum'.

Terming the withdraw of old Rs 500 and 1,000 notes from circulation as "excellent" and "good" move, Kant said there would be short-term issues due to the decision but in the long-term there would be huge gains.

"It is a very mammoth and unprecedented thing. There will be some short-term issues. I don't think we need to worry about them.... The Prime Minister has said 50 days (to weed out black money)," he asserted.

The country, he said, is moving from non-formal economy to a formal economy, so the people should have patience and faith.

The government on November 8 demonetised Rs 500 and Rs 1,000 notes in a step to curb black money. Following the announcement, banks and ATMs witnessed chaos and long serpentine queues for over a week as cash-strapped people waited in frustration to exchange old defunct notes or withdraw valid bills to pay for their daily expenses.

Now, after nearly two weeks of demonetisation, people seemed to have got some respite as queues to get valid notes have shortened and about 40 per cent of total ATMs have started dispensing new valid notes.

Meanwhile, the Opposition parties have been protesting against the demonetisation move and are also demanding Prime Minister Narendra Modi's statement in Parliament on the issue.

Amid uproar over the issue, proceedings in both the Houses have been disrupted.