Non Resident Indians – More than what meets the eye ?
2008
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Athreya - Profile
There are 3 more posts on Jai Hind: Proud to be an Indian by Athreya
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Business, Economy
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dollar, FDI, foreign, india, NRI, pounds, USA
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If you write about India or Indian matters, and happen to be based outside India, it comes as no surprise to see a couple of ‘ why don’t you come back to India first.. ‘ or a ‘ what do you know ?’ taunts pop up in the comments. Many of these, from the web 2.0 crowd that has embraced the IT boom and blogging, and are themselves an integral part of it. We have come to accept, embrace and revere the beacons of India’s web 2.0 : the Narayan Murthys and Premjis — who as Czars of Nasdaq & NYSE listed conglomerates, made their riches in dollars and pounds among a bunch of other currencies. NRNs and Premjis are national heroes while your typical NRI, is a deserter who is pursuing his dreams outside the subcontinent. Quite a few of these IT giants/heroes, rightfully praised for their entrepreneurship, have shied away from doing domestic IT business as the profits are shallow and it does not make business sense. On the other hand, a garden variety NRI, gets a jeer for the foreign association. Why the different yardstick ?
Since the rupee to dollar conversion provides a multiplication factor circa 40, a dollar saved is 40 rupees saved ; hardly anything you did not already know. The factor is similarly attractive in some other foreign currencies as well. This has been a strong reason for Indian nationals, and companies alike, being interested in overseas markets — yours sincerely included. I offer no other altruistic, untrue reason that intends to side swipe this gospel truth. None is needed in my opinion, for it is not a crime to pursue your dream while being rooted deeply with the mother ship. Far from jeering, NRI baiters may have a reason to thank me and my ilk. If you think this is another bored to death NRI spinning a tale. No, I’m not about to spin a tale, I sit on my tail thank you.
…get this India’s FDI(2007)-$16 billion ; NRI remittances-$29 – translating to $90 billion…
India is rising and the world is taking note. India’s ‘Foreign Direct Investments(FDI)’ has witnessed a startling surge. As compared with $16.5 billion over the whole of the 1990s at an annual average of $2.2-3.2 billion, the FDI for 2005-06 was pegged at $5.5 billion. In 2006-07, it touched $11.19 billion and for 2007, by Oct-2007, it was at $15.7 billion and climbing. It is downright stupendous when your current year investment(2007) is as much as the whole investments in the last decade pre-millennium(1990s).
In another seemingly unrelated yet relevant news, Western Union, on Jan-14 proudly opened it’s 50,000 th Agent location in India. Western Union, a provider of global money-transfer services facilitates cross-border money transfers. According to the Reserve Bank of India, India is one of the largest receivers of remittances. How much is it anyway ? And shall we compare that with the FDI we are so proud of ? Sure, how does 200% of FDI sound ? There is no typo there, the remittances were in the excess of $26.9 billion for 2006-2007. Now contrast $29+ billion with India’s 2006-07 defence budget as the fourth largest military on the planet : $20 billion. By the time you have collected your jaw from the floor to retort about the urban rural disparity in the flow, let me tell you that Western Union’s 50,000 Agent locations in India span over 5,000 cities, towns and villages. This includes more than 8,500 post offices and more than 14,000 branches of leading banks. That’s clearly not just your major metros ? And it gets even better, $30 billion is more like $90 billion !
“If the world bank is correct, every dollar remitted contributes 3 dollars to the GDP growth – which means that NRI’s are contributing to growth of almost a $ 90 billion to India’s rural economy…”
–Shekhar Kapoor the noted film maker who pursues much of his dreams overseas as in India.
Per above, the NRI funds seem to disseminate better into the rural areas than many a fancied FDIs.The common man being left out card doesn’t hold water either. Yes the IT boom and the ‘going abroad’ becoming a commonplace has created an economic imbalance. But the same has also led to the vast upwardly mobile bludgeoning middle class that has a better quality of life. Per above the myth that this boom has not helped the poor, is well, a myth at best. The McKinsey group’s detailed study takes a realistic note of the ground realities, the above included.
Relevant Excerpts from McKinsey :
“Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94 percent in 1985 to 61 percent in 2005, and we project that it will drop to 26 percent by 2025..”
“The Indian middle class has already begun to evolve, and by 2025 it will dominate the cities. By then about three-quarters of India’s urbanites will be part of the middle class, compared with just more than one-tenth today….”
I have great respect for people who are driven enough to pursue their ambition, and go where it takes them. Likewise, I have profound respect for people who are grounded enough to seek those dreams from their home soil. If you will be the former vs. the latter, is more often than not, a matter of circumstance with a million other influences. To say one is, in any way better or noble compared to the other, is myopic and naive. In times when the world is getting flattened and global sourcing is an accepted norm, we need to get past the denial and onto acceptance.
When was the last time you picked up something that did not have a foreign collaboration slapped to it ? From the Colgate that starts the mornings to Suzukis-Mazdas-Volvos that ply you to software parks that cater to a largely foreign customer base via the HP-IBM-DELL desktops running Microsoft’s Windows to the Pepsis-Cokes to the the Lays chips to the ipods, you are more of a global citizen today than ever before. It is no secret that, given a sliver of chance, very many of these critics and jeerers would only be too happy to pack their suitcases and line up at the embassies. That notwithstanding, remaining germane to the issue, if ‘Foreign Direct Investment’ and ‘Non Resident Indian’ investments are key to India’s growth, and NRIs, apart from re-investing in India do influence the FDI flow as well, we ought to treat them better ? $90 billion is no chump change, and a similar phenomenon is not happening in China that is oft compared to India, and China has a bigger expat population.
NRI Indians have a very strong sense of bonding with the mother ship and this helps India. If the remittances cannot make a believer out of you, just look at any popular site’s sitemeter. The diaspora that checks in is not all domestic traffic. Nostalgia, sense of belonging or longing, sardarji jokes, Rakhi Sawant or Deve Gowda, all of the above that gets them there, is pure Indian. From the bollywood movies to the temples-mosques galore, the Indian diaspora has kept in touch with the Indian culture, despite being away and in their own way.
The above is just my view point. I’m sure there are interesting, constrasting thoughts on both sides of the sea. Let’s hear them….
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There is one other very important contribution of NRIs – that of creating a brand image of India. This has been achieved over a 30-40 year period by the hard work and achievements notched up by Indians in diverse fields. This helps Indian companies do business with an inherent advantage.
However, this brand needs to be nurtured and we need to maintain the underlying values to be able to continue to take advantage of it.
Unfortunately, it is very very sad that brand India is taking a hit – largely due to the policies of Indian Govt and their stymied execution of plans in areas which provide a framework to further trade and business.
Due to the hard work of the previous generation of Indians – especially in US; it has created an image of Indians being sharp, smart, hardworking and able to achieve laurels in diversified fields – medicine, aerospace, pharma, academics, IT, management etc.
So based on that positive image, say some Americans decide to travel to India. Our image takes a hit as their plane lands in Mumbai – the so called international airport is like a bus station compared to airports even in the developing nations. It is common to see staff sleeping at the airport, or just lounging around – with no proper uniforms or in shabby ones. Toilets are not clean. The lighting inside the terminal is dim. The guys at the immigration check, are sullen guys dressed in khakis. Then we find that there are no public telephones at the airport!! Many airports in the world have huge number of telephones and very often have free local calls – but not in India. Then when you step out – you see a huge crowd right outside even at 2 am in the morning. Somehow if you have done your homework, you would know that you can book a taxi from inside – if you don’t know that; suddenly you are surrounded by a crowd of taxi drivers – again, no proper uniform, and without any training to have any sense of sensitivity to other cultures. Coming from a distant place where personal space is a given – our guy is wondering, “why is India in such a shape?” – and he hasn’t even seen the roads and infrastructure as yet!
When foreigners travel to India – they suddenly have to make adjustments to the image of Indians being smart and hardworking. The local host, has to keep making excuses to explain off the lack of proper roads, the garbage strewn all over, the lack of pavements, the huge amount of poverty etc.
Thats where our image takes a massive hit – and they must be wondering; “if Indians are so smart, how come the country is so broken”? “When they can launch satellites in space, why can’t they build proper roads and pavements”?
And this dude hasn’t yet started traveling in India. Then he gets hit with idiotic policies of the Govt of India – where he has to pay Rs 750/- and an Indian has to pay Rs 20 – to visit the same heritage site. Little wonder, that with 5000 years of preserved history, with so much of diversity of terrain, cuisine, traditions, festivals, dance forms, languages etc – teeny tiny Singapore attracts more tourists that India!
Unfortunately, well meaning Indians can’t do any damn thing about this disconnect. As people travel more and do more business – our image takes a massive hit…and we don’t have very many excuses to keep dishing out. The only thing that they can do, is to exercise some self control so that we ourselves don’t become part of the problem. That too, is very hard for most educated Indians to do. You can see them peeing, spitting, throwing wrappers from cars almost on a daily basis.
As far as the infrastructure goes – it is in the hands of the incompetent people of the Govt of India. And now with so much of infrastructure outlay and Govt coffers being full of taxes – the old excuse of “poor country” does not hold any water. Till they have employment terms which guarantee job for life, no accountability and full pay irrespective of “output” – absolutely nothing is going to change or the change will be so insignificant, that by the time they build one road – the previous one will be broken because of very poor quality. The Indian Govt’s overall delivery mechanism is like a bucket with the bottom falling out – no matter how much water is poured, nothing will really be retained, unless the bottom is first repaired. Over and above they have a “dog in the manger” attitude – they know they can’t deliver anything – but still they are hanging on to their power to control the budget.
In a global world, no one has the lock on intelligence or competence forever. The brand advantage that India has got will not last forever. It is in danger of getting diluted to insignificance if Govt of India does not get its act together.
@coolvyakti,
Thanks for such a detailed comment — it’s a post in itself. What you say is so true. Your starting and parting words sum it up for me..
Well said guys. Its only young that can make diffrence. But when i look at the engineers in Bangalore that are working for MNCs, other Indian companys improvement seems to be a far cry. When you look at the beautiful forwards with all the touching stories, morals it is one thing. And when you hit the road this very young lot on bikes and cars are the first ones to create chaos. These are ones who ride on the footpaths with total disregard to the pedestrians fate. These are the ones in the cars who rush from every directions in the intersections, these are ones who buy, eat and throw all the plastic wrappers, cups …you name it. If this is the sense of responsibility that these young guns have i dont know whats the future?
I am yet to see a young guy stting an example in a public place in any of the matters that i have narrated. I am yet to see a young guy (i have seen old people doing it, but who cares for thrm?)stopping by a place where in he stays to just question somebody who is digging the just laid road, erecting pendals by mindlessly digging the road. What our young guy does is coolly he turns his bike/car and find an alternate road and types in a mail or creates a powerpoint and forwards it. Ummnn i am an ex-serviceman and when i see the apathy of this young lot, sometimes i wish that may be we should have had a compulsory military service as it was in US of A.
Now its left to an outsiders to do something. Half are corrupt and some are helpless. And who can make the difference is totally indifferent.
God save.
Utterly perceive what your stance on this matter. Though I would disagree on some of the finer particulars, I believe you did an superior job explaining it. Sure beats having to research it on my own. Thanks
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