Why Steve Forbes called demonetisation a ‘massive theft of people’s property’

Steve Forbes, the Editor-in-Chief of Forbes magazine on December 23, criticised the demonetisation move in an article by saying that it was a 'massive theft of people's property'. Here's what he had written.

By: FE Online |  September 4, 2017 

PM Narendra Modi’s demonetisation move in November has come under the scanner once again after the Reserve Bank of India released its Annual report. On November 8, the central government had scrapped Rs 500 and Rs 1,000 notes and claimed that the decision would eradicate black money, fake currency and corruption. When the bills went out of circulation, the central bank issued Rs 2,000 notes and a new series of Rs 500 notes. Meanwhile, the annual report by RBI said that 99 percent of scrapped currency notes came back to the banking system. Additionally, India’s GDP growth tumbled to 5.7 percent in the April-June quarter this year, giving signs that the slowdown was induced by demonetisation. Ever since the GDP data was released by Ministry of Statistics came out, critics have been having a field day. This also brings to light an article written by Steve Forbes, the Editor-in-Chief of Forbes magazine on December 23, where he criticised the demonetisation move by saying that it was a ‘massive theft of people’s property’.

In his sharp attack on PM Modi’s demonetisation move, Steve Forbes went all out and said what they have done to the money is “sickening and immoral”. Forbes called the Indian bureaucracy to be ‘notorious’ for corruption, red tape and lethargy. In the article, Forbes has given an overview on how the demonetisation move was carried out by the government; about the cash crunch, ATM queues, and the increase in governmental control over lives. Here are the reasons why Forbes said, what he said about Modi’s demonetisation move.

1. Forbes compared the decision with former Prime Minister Indira Gandhi’s infamous sterilisation program in the 1970’s, calling it Nazi-like eugenics. Forbes wrote: “Not since India’s short-lived forced-sterilization program in the 1970s–this bout of Nazi-like eugenics was instituted to deal with the country’s “overpopulation”–has the government engaged in something so immoral.”

2. Forbes has criticised most of the narratives which the government has been using to support the demonetisation move. He also wrote about how businesses are closing as companies are not able to pay their employees.

3. Forbes condemned the excessive rules and taxes imposed by the Indian government, which he says is the reason of the informal operation of a cash-based economy.

4. On the issue of terrorism, Forbes said that just a currency change cannot stop terrorists from committing evil acts of terror. Coming down heavily on the reasons cited by the Modi government for the note ban, the magazine said: “Human nature hasn’t changed since we began roaming this planet. “People will always find ways to engage in wrongdoing. Terrorists aren’t about to quit their evil acts because of a currency change.

5. On the issue of digitisation, he said that it will happen in a free market one way or the other, but it needs time.

6. Forbes suggested that India should get rid of such a complex tax system, which is the main reason for tax evasion. Forbes suggestion for India is, “…slash income and business tax rates and simplify the whole tax structure; make the rupee as powerful as the Swiss franc; hack away at regulations…”

7. Forbes lambasted the countries which have been making similar moves like demonetisation by using the reasons provided by the Indian government. He said that such a move is only about making the government have more control over personal lives.

8. Forbes wrote: “India is the most extreme and destructive example of the anti-cash fad currently sweeping governments and the economics profession.” He added that India, apart from immorally harming its own people, has also set a bad example for the rest of the world.