Chennai (Tamil Nadu), Nov. 14 : Acknowledging the government for its introduction of the demonetization of currency in the economy, Former RBI governor C. Rangarajan on Monday said the Government's move to demonetize is a standard direction to extinguish reduction in circulation of black money.

Speaking to ANI, Rangarajan said, "This is a common step taken whenever an effort is made to curtail the circulation of black money or unaccounted income."

"In India, it is not the first time that it has been done, such steps have been taken in the past also. This time apparently there are three targets; one is to attack those who hold black money as a citizen."

"Second, it is to hit people who fine terrorism. Third, is who may be involved in creating fake currency note. However, the first is majorly the focus," he added.

Assuring that there will be a reduction in circulation of black money or accounted income, Rangarajan said the attempt this time appears to be to cover much larger segment of the notes in circulation.

Responding to the query on the problem witnessed by the people in withdrawing currency notes from ATMs and bank, he said, "I do hope in next few days the cash problem will be sorted otherwise some sector will be affected."

When asked about the long-term impact of these measures, he said, "It will affect the retail trade as most of the transactions are done using cash... There are some other sectors in the economy like real estate, jewellery where cash has become a major player for transaction. Those will undergo a fundamental change."

"On good thing is that people now thinking of transacting in other forms than currency, if it catches on then it's a big change," he added.

The Government on Monday set up a special task force headed by Deputy Governor of RBI to expedite the process of re-calibrating the ATMs to make them fully functional.

The task force will work with different banks in this direction. Addressing the media, Prime Minister's last night meeting to review the demonetization and its impact, Economic Affairs Secretary Shaktikanta Das said, the ATM re-calibration has started and some of the ATMs will start dispensing higher denominations, including Rs. 2000 notes, from today or tomorrow.

ATM limit has also been increased to RS. 2,500, however, it will be disbursed only by the re-calibrated ATMs.

Saying that there is no need for public to panic, Das assured that there is enough cash available in the system and situation will ease in coming days. (ANI)