The governor of the Reserve Bank of India Shaktikanta Das has stated that the impact of the withdrawal of Rs 2,000 notes will be minimal on the economy. I am not convinced by the RBI governor's optimism. Already petrol pumps are facing a huge cash crunch. Hitherto, most of the payments at the pumps were made by cards. Now suddenly 90% of payments are by Rs 2,000 notes. Pump attendants do not have sufficient change with them to satisfy their customers. The situation will get worse when malls face the same situation. People will make small purchases and give Rs 2,000 notes. How will they operate? It is said that bad money drives good money out of the market. The Rs 2,000 notes may likewise make small currency notes scarce. I sincerely hope the RBI has not bitten off more than it can chew.
