Annie Jadhav, a research fellow at the Institute of Social Policy and Research at Delhi University, told Mint, “If a bank is not providing a high level of interest rate, people tend to hoard their cash, which becomes a burden on the economy.” This means the consumer price index, which is widely cited by the government, is probably under- or underestimating the true economic cost of the demonetisation move.

The number reported by the Central Board of Direct Taxes (CBDT) does not correspond to the actual cost of goods and services consumed by Indians. In a recent study, the CBDT had reported consumption losses of Rs 12,500 crore. This was because in the first ten days of the initiative, the amount of cash in circulation has been reduced to nearly 70% of its level before the November 8, 2016, announcement that 500 and 1,000 rupee notes would be a thing of the past.

Dalita Gupta, chief executive of the Indian Bankers Association, who has also been critical of demonetisation, claims that the real losses to the economy could be as high as Rs 25 lakh crore.

However, economists say that in terms of the impact on GDP, the real cost does not appear to be at all of the magnitude as reported by the CBDT. According to a paper by economists Ashwini Kumar Singh and Prakash Karat from Tata Institute of Social Sciences, GDP of India would have been down $1.3 trillion in 2016 had the measure been fully implemented: “Based on the estimated expenditure impact of demonetization on GDP, the true cost of demonetization would be around $1,000-2,000 billion annually.”

It can be argued that as the economy recovers, the true cost of demonetisation will fall over time. “But the impact of demonetization will certainly take longer to be felt than people will now imagine,” says Kumar. “The long-run effects are a bit debatable because they will be measured in decades.”

With the current pace of demonetisation, many analysts see no end in sight. “There are a lot of unknowns left in the economy,” says Karat. “We see a lot of uncertainty about how this exercise will evolve over the longer term.”

And there is uncertainty that may weigh particularly heavily on consumer confidence. Consumer confidence, which includes the sentiment that is driven by expectations about price inflation