Praveen Chakravarty, Visiting Fellow at IDFC Institute, points out that the growth in high denomination currency circulation was proportional to the rise in GDP. He says:

"To test that hypothesis, Urjit Patel may have further done a logarithmic growth analysis of GDP, banknotes and high-denomination notes in circulation to test if there was a disproportionate growth in high-denomination notes relative to GDP growth. Again, he would have found nothing alarming or extraordinary in the growth of such high-denomination notes over the last five years, as the government claimed. Over the past decade, the banknotes in circulation have been remarkably consistent with growth in GDP, refuting the government’s theory that there is a worrying rise in currency in circulation. He would have surmised that since overall banknotes in circulation have been consistent with GDP growth, any small increase in high-denomination notes is merely a substitution effect from smaller denomination notes."

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