Demonetisation would only affect common man: Chidambaram

Disputing government's claim that demonetisation of higher value currency notes would check black money, former Union Finance Minister P Chidambaram on Saturday said it would only affect the common man.

The senior Congress leader said people were facing difficulties in purchasing medicines, buying bus, and train tickets and paying for auto-rickshaws because most of the notes in circulation were of Rs 500 and Rs 1,000 denominations.

"They (government) say withdrawal of notes that are highly in circulation will not affect the common man. That is quite a funny statement," he said.

"It is not a step to curb black money... The Centre's move will only affect the public and that is my view," he told reporters here.

Chidambaram said that in 2012, the Central Board of Direct Taxes had advised the Centre to avoid issuing Rs 2,000 currency notes, saying it would bring more harm to the public than benefit.

"Ignoring it, the Centre has withdrawn Rs 500 and Rs 1,000 notes that are highly in circulation," he added.

The former Union Minister further said that 86% of the total value of currency notes in circulation was in the denomination of Rs 500 or Rs 1,000.

Chidambaram said there were currency notes worth about Rs 17 lakh crore in circulation across the country, and according to the RBI, about Rs 400 crore of this was believed to be fake currency.

"Just to destroy Rs 400-crore fake currencies, why the circulation of total Rs 17 lakh crore was needed to be blocked," he asked.

On criticism by the BJP that Congress Vice-President Rahul Gandhi standing in a queue to exchange notes was just a 'photo opportunity', he said, "what can he do? How can a person live with a currency that is invalid? That is why he went to exchange Rs 4,000 (to the bank)."

"I do not know whether the valid notes were exchanged in the houses of the respective ministers. For rest of the people, one has to visit the bank for exchange of notes," he said.