New Delhi: Kerala Finance Minister Thomas Isaac on Saturday described the Centre's decision to demonetise old Rs 500 and 1,000 notes a "national calamity" which has put the nation in a turmoil.

The crisis following the cash deficit has percolated to even the organised sector and will result national production loss of Rs 2.5 lakh crore, he said while addressing reporters here today.

This has led to people thronging banks and ATMs to withdraw their money. The Reserve Bank has set cash withdrawal cap at Rs 24,000 a week.

"There is going to be a severe downturn. Even if you take 2 per cent (decline in GDP as suggested by former prime minister Manmohan Singh)... it means something like loss of production of Rs 2.5 lakh crore...," Isaac said, adding that the Centre's move is now impacting almost all sectors of the economy.

He dubbed it as a failed exercise, saying Prime Minister Narendra Modi is shifting the goalpost to cashless economy. "Whole nation has been put into turmoil. Modi's demonetisation has become national calamity," he said.

He countered Finance Minister Arun Jaitley's claims of about Rs 3 lakh crore expected gains from the exercise, reeling off data that he said suggest about Rs 11.5 lakh crore of the invalid currency have already returned to the banking system.

"Even if you give a very generous estimate of Rs 1 lakh crore (of gains)... you have sacrificed Rs 2.5 lakh crore of national product for unearthing Rs 1 lakh crore of black money. This is an enterprise that has totally failed," he said.

Referring to 2002 Gujarat riots, Isaac said "he (Modi) looked unruffled, took it in his stride and for various reasons, he was able to take people of Gujarat along with him. I think he wants to do another similar exercise (about demonetisation) at all-India level".

"What the Prime Minister should understand that things are getting out of hand. There is limit to people's patience. How long can they stand in the queue...Let us come to senses. Have a discussion in Parliament accept something terrible has happened," the Kerala minister said.