Last week this writer had suggested that the costs of demonetisation may well outweigh the gains. The Left ecosystem, which uses every opportunity to demonise Narendra Modi, picked up the story like god’s truth.

I stand by my interpretation, but the reality is more nuanced than this. V Anantha Nageswaran has pointed out in an article in Mint newspaper that this is a rush to judgment, when the gains may well come over the long term. It is a valid criticism, but there is also another reality to reckon with. In the case of demonetisation, we may never be able to finally compute its long-term gains because it is being overtaken by another major disruption: the goods and services tax (GST), which is being implemented from 1 July.

In the early days of demonetisation, one had presumed that while there would be two quarters of GDP slowdown, by the first quarter of 2017-18 (the ongoing one that will end on 30 June), the economy would rebound.

But GST may well have put paid to that hope. Reason: India Inc has launched a firesale of everything from cars to two-wheelers and computers and mobile phones in order to clear out stocks in the pipeline before the onset of GST. Reason: it is not clear whether old stocks will be entitled to GST’s duty setoffs.

This fact hit me in the solar plexus when I received unsolicited email from dealers offering to sell me costly Swiss watches at 70-80 per cent discounts to their list prices. The proud Swiss will be gnashing their teeth at the damage done to their brand images when watches are being sold like kirana goods.

The Economic Times reports that car dealers are selling vehicles at huge discounts, and June car sales may actually fall 8 per cent after two robust months of revival in April and May.

A Business Standard report confirms that “it is raining discounts” at electronic goods retailers.

Another report says that while discounts in the range of 20 per cent are now passe, as we near the 30 June deadline, they may yet go through the roof.

It is tough to imagine how this will play out in GDP statistics, but if discounts are high, it is a fair bet that value-added by India Inc will fall in many product groups and companies. This could impact retail margins too, since stocks in the pipeline have to be cleared quickly.

A corollary: if stockists and companies are chucking away inventory, and if manufacturers are going to start the production schedule anew from 1 July, it may well take another two to three weeks for these post-GST stocks to start reaching malls, showrooms and stores. More so, since manufacturers have to not only be GST-compliant themselves, but also ensure that their suppliers are compliant. This means the whole of July may see a production or sales drop as supply chains are poked into compliance mode, and companies work out optimum prices keeping the new GST slabs in mind.

In short, output and sales could be impacted both in June (the first quarter) and in July (which is the first month of the next quarter).

A similar churn will be happening in services, which will bear the brunt of the new tax regime. There will be more heartburn as even states start scrutinising services companies for compliance.

Another bout of minor disruption could happen after two months, if rates have to be rejigged in some sectors due to a sharp drop in sales or revenues.

If GST is going to take over from demonetisation as the main disruption going forward, how will it ever be possible for us to decide some gain is due to the latter?

We have to reckon with the possibility that we may never be able to have the last word on DeMo. You have to wind up your judgments this month. The data will get muddier every month from now.