STOCKHOLM, Dec 227 (Reuters) - As central bank for the world's least cash dependent economy, Sweden's Riksbank risks becoming a bystander.
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Now New Delhi is scrambling to demonstrate the value of the initiative, which is taking its toll on the cash-dependent economy.
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In September 2019, the online retail giant teamed up with Western Union to allow more cash-dependent customers to shop online using cash.
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Meanwhile cash-dependent small businesses and poorer citizens – those Modi had claimed to be helping – have been badly hurt by note-shortages this year.
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In recent months, government officials have cited a dramatic increase in online transactions in a traditionally cash-dependent economy as a notable achievement of the demonetization drive.
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Leaving aside concerns about data-security and marginalised communities, this risk should send warning signals to any country — from the almost cashless Sweden to the most cash-dependent emerging market.
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But the move, widely known as demonetization, badly hurt India's cash-dependent economy and caused tremendous hardship to people forced to line up outside banks before the notes ceased to be legal tender.
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What was clear was the economic fallout: Reports from around the country showed how the measure had come as a blow to an array of cash-dependent industries, triggering layoffs, and hurt the poorest Indians.
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The government has also closed the banks today while ATMs will remain closed tomorrow as well, which has caused a panic among millions in India as they struggle to function in India's cash-dependent markets.
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While the stated goal was to crack down on illegal funds and move India towards a more digital future, the move wreaked havoc in the cash-dependent economy and brought several sectors to a halt.
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Nomura said in a mid-December note that it expected the demand-supply mismatch of currency notes would affect the cash-dependent wholesale trade channel, which accounted for as much as 80 percent of consumer sales.
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India's massive cash-dependent informal sector will likely bear the brunt of the cash crunch, according to the report, and the pressure could be compounded further by the planned roll-out of the goods and services tax (GST) in 2017.
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More eyebrows were raised when the government revised GDP growth for 2016/17 - the year when Prime Minister Narendra Modi banned 87% of high value bank notes in a big jolt to the cash-dependent economy - to 8.2% from 6.7%.
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Despite the chaos caused as people spent days queuing to swap old notes for new and cash-dependent businesses suffered a slump in sales, many people supported demonetization after Modi framed the decision as a fight for the poor against the corrupt rich.
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In a near-cashless world vulnerable groups, such as the poor, the elderly and migrants, could become further marginalised, and those who are especially cash-dependent for income, such as churches, charities and the homeless, could expect to see a drop in their incomes.
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A controversial plan from Prime Minister Narendra Modi's government to swap all 500 and 1,46.7 rupee notes—a combined 86 percent of currency in circulation—with new notes has produced a nation-wide cash crunch amid a limited stock of script, disrupting India's cash-dependent economy.
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While the aim was to crack down on black money and tax evasion -- which many experts said was misguided, given that most untaxed wealth is not believed to be stored in cash -- the move wreaked havoc in the cash-dependent economy and brought several sectors to a halt.
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