"Scrapping the high-value currency notes will be a problem for the hoarders of black money. As the state government has no role in the demonetisation, we don't oppose or support it," Siddaramaiah told reporters here on the sidelines of a function.
The Chief Minister, who also holds the finance portfolio and presented a record 12 state budgets over the years in three governments since 1996, said the common man will face hardship as the drastic move was made overnight.
"Though the general public will not have a problem with the demonetisation per se, they will face hardship for some days till they get new notes in lieu of the old notes, which have been scrapped suddenly," said Siddaramaiah.
Prime Minister Narendra Modi on Tuesday night announced that Rs 500 and Rs 1,000 notes will cease to be legal tender effective November 8 midnight as part of a string of measures adopted by the government to fight black money.
In contrast to the Congress high command stand, including its Vice-President Rahul Gandhi, who criticised the Centre on the demonetisation issue, many state ministers welcomed the move and said it will help curb the parallel economy.
Praising Modi, state Revenue Minister Kagodu Thimmappa said the Centre had to take a tough decision to safeguard the country's interest by fighting the scourge of black money.
"Though the common people will be inconvenienced initially, they have been given enough time to adjust to the new system and exchange the old notes with new ones," Thimmappa told reporters here.
State Home Minister and ruling party's state unit President G. Paremeshwara said the Modi government had demonetised high value notes to curb black money though the middle class and small traders will be affected by the suddenness of the move as they will face a problem in replacing the scrapped notes.
Flaunting bundles of Rs 100 notes, state Power Minister D.K. Shivakumar said the people will find it difficult to carry huge amounts of cash in Rs 100 notes till new notes in higher denomination were available easily and in surplus.
"How do you expect people to carry so many bundles of Rs 100 notes for their daily expenses, especially traders and small businesses who transact only in cash?" asked Shivakumar.