



Last Sunday Prime Minister in the radio programme ‘Mann ki Baat’, while addressing the country said, he wants the country to have less cash transactions, which will eventually make India a cashless economy altogether. No wonder, he won round of applause from the people. The basic aim of this, he said, is to curb black money and make sure each and everyone in the country pays tax to the government.There is no doubt about Modi’s goodwill . However, before we start paying autowallahs and vegetable sellers in the neighbourhood through mobile app, let’s have a look at how the world’s first cashless economy in Sweden is doing.To believe media reports, Sweden is shaping up to be the first country in the world to plunge its citizens into a fascinating - and terrifying - economic experiment – a cashless society.Sweden started the journey towards cashless economy since many years. Take a bus ride, buy a magazine or a chewing gum, digital payments are accepted everywhere.This is the country where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATM machines from rural areas, annoying old people and farmers. There is a belief in the country that if you have to pay in cash, something is wrong.That sounds quite futuristic until you know the truth. The Interest Rate at Sveriges Riksbank, the central bank in Sweden is -0.500% since last February.Although retail banks are yet to pass on that negative to rate to Swedish consumers, the longer it's held there the more financial pressure there is for banks to pass the costs onto their customers.So here lies the danger. The commoners have to keep the money in bank and pay for it. They cannot withdraw cash and cash transactions are refused by retail stores legally. The senior citizens are the worst affected as they lack concentration to focus on mobile banking.It’s a fact that Swedish can’t hide their money. But citizens need to pay banks charges for keeping their money and that’s the way of survival.As per a Quartz report, surveys conducted by Riksbank show that for transactions fewer than 100 kronor (approx. Rs 750), 41% of people still prefer to use cash. And the Swedish National Pensioners’ Organization, which represents some 400,000 of the country’s elderly, says 7% of its members never use bank cards.Now think of this situation in India. There are some millions of widows, unemployed and retired employees who thrive on bank interests for survival. After demonetization, we have seen interest rates of nationalized banks slumping down to 4%-5%, which is 3% below normal rates. Most people in the service sector has only one way to save their money – either through fixed deposits or several schemes, which gives a good percentage of annual increment.And what are the obstacles that can happen in a cashless society? There may be a rise in fraud rates, people’s discomfort about electronic footprints in semi urban and rural stores . Another industry that would be badly hit by cashless economy is tourism, the proof of which has already begun to show in Sweden. A news report by The Guardian says that a grand music festival in Sweden sparked chaos after their payment system broke down.India heading towards a cashless economy is a great thing! But can the Indian middle class handle it?