Union Finance Minister Arun Jaitley has said that 'demonetisation is obviously disruptive as are all reforms as they change the retrograde status quo'.

Accepting that implementation of demonetisation carried pain and led to short-term criticism and inconveniences as well as a drop in economic activity, the FM said, "Squeezing out of 86 per cent of currency constituting 12.2 per cent of GDP (gross domestic product) would obviously have significant consequences."

He said the period of pain and inconveniences is getting over and economic activity is being restored.

"Queues outside the banks have disappeared and the remonetisation has moved ahead," Jaitley said.

He also said that reducing cash may not eliminate crime and terrorism but it can inflict serious blow on them.

He said more money with banks is bound to bring down the rate of interest. -- PTI