Ahluwalia also urged the government to immediately try to put the economy back over the 7 per cent growth.
"The immediate objective should be to put the economy back over 7 per cent growth.
"Instead of 7 per cent, the economic growth will be 5 plus or 6 plus this year. However, the underlying strength remains.
"So, once the shock due to demonetisation is behind us, economic growth should be above 7 per cent," he said.
The Reserve Bank has cut the economy's growth forecast for the current fiscal to 7.1 per cent, from 7.6 per cent earlier.
It said that short-term disruption in economic activity and demand contraction arising out of demonetisation had led to downside risks to growth.
Ahluwalia was speaking at an interactive session at the Bharat Chamber of Commerce here.
Asked about whether the note ban was required, he said: "I would not have recommended demonetisation.
"I would not have said that demonetisation is an instrument for digitisation," he added.