FIRST STRIKE
Spotting the NRI
ANIL DHARKER
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... but half of their money coming into India does not come as investment.
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R.V. MOORTHY
AS expected, Forbes' Rich List includes Indian billionaires. And, as expected, Non-Resident Indians (NRI) are part of the Richie Rich register. As a matter of fact, NRIs seem to be on everyone's agenda.
Especially this Government's. It started a special annual convention for them (Pravasi Bharatiya Divas) and instituted awards for them (Pravasi Bharatiya Samman). The Lok Sabha passed a Dual Citizenship Bill which gave NRIs from 16 specified countries the right to keep their foreign passport and get an Indian one as well. In short, the red carpet is being rolled out. Late in the day, some might say, but it has been taken out of storage and there's no hiding the large Welcome sign.
Do NRIs really do much for India? Some figures suggest yes. Persons of Indian Origin send back more money to the mother country than any other people in the world. In fact, they send as much as 15 per cent of the world total. The money coming back to India is seven times that of China according to a survey conducted recently. (Figures from January to September last year show that NRIs sent $13.3 billion, which is much higher than Mexico's $9.9 billion and China's $1.9 billion). This is made possible not just by the large number of NRIs (20 million) but also by the high average amount sent back by them.
Is that doing enough? Or are we Oliver Twists asking for more?
What the above statistics do not show is that more than half of these remittances are from Indians in West Asia. Given the profile of the average Indian who goes there, you have a skilled worker from Kerala in the construction business or similar, sending back part of his wages back very month to be put into savings, a house and a retirement kitty for the future. Which means that more than half of the NRI money coming into India does not come as investment. The U.K.-based economist Lord Meghnad Desai has said that this is due to the fact that "India has an image of being a fiscally soft country". According to him, nothing will change unless it can be shown that "things work in India".
Could this be the reason why Laxmi Mittal, the world's second largest steel maker, has not invested in India? He has only recently said that he is now looking at India, but the point is that he has bought or set up plants in South Africa, the Soviet Union and even in China. Not in India. Then there's Arun Sarin, Chief Executive of Vodafone, the world's largest mobile operator. The company he runs operates in 26 countries and has 125 million customers. But Sarin closed down Vodafone's Indian operations and has no immediate plans to return. Gul Lalvani of Binatone, the world's second largest digital phone manufacturer after Siemens: has his phones for the Western market made in China. What does he do in India? Charity work. (For the record, Binatone did try to come into India, but didn't do well enough to continue.)
It's not just industry: in a different field, the Bharat Shiksha Kosh has attracted very little money. The fund was constituted last year by Murli Manohar Joshi's ministry to attract NRI funding into the field of Indian education. Some NRIs, particularly Indian Institute of Technology (IIT) graduates who have done very well in the United States, have given large sums of money to their alma mater, but those have been isolated, not a concentrated attempt by NRIs to help in India's educational development. There's no investment in other fields either: infrastructure, health, retail, services... .
So, then, do we say that the contribution of NRIs to the mother country will be restricted to savings and charity? Surely that is far too limiting in scope. It is also not a true representation of the intangible contribution they make by just doing what they do.
Who, after all, has made the "Brainy Indian" part of America folklore? The techie IITian. Who has made the "Amazing Indian entrepreneur" part of Western folklore? Laxmi Mittal, Amar Kumar Bose and their ilk. Who has made "Follow the Indian" part of international corporate folklore? The Indian head honchos of international conglomerates of whom Vodafone is one of the smaller entities. Together they make a formidable case for India; a public relations exercise like no other, with no cost to us. But, still, it's time we asked them to do more.
Money isn't everything, though it's almost everything. But money needs arm twisting to get it and complete transparency about how it is spent. Behind Lord Desai's polite words you sense the truth: which NRI would be willing to donate money if he wasn't sure of its final destination? A fund raising effort addressing these issues will be highly fruitful, but the fund raising will have to be done directly by the institutions involved, not by the government. If the Indian Institutes of Management (IIM) and the IITs and the other high profile, high achieving institutions need reduced government funding because they can raise money abroad, that will mean that the government can increase its education budget where it is needed most: in primary education.
As for NRI investment in the corporate sector, isn't it telling that the Mittals and the Sarins would rather go elsewhere than in India? If Arun Shourie is the Disinvestment Minister, surely there is a case for a dynamic Investment Minister? Someone whose ministry has the power to cut red tape, to reduce bureaucratic obstacles, to put matters, quickly, on track.
Finally, there is the little matter of Indian studies abroad. Someone pointed out that China, West Asia, Japan and even Tibet are better represented in Western academia than India. The long-term effect of this on young minds, many of them likely to be foreign leaders, is incalculable. Suppose NRIs were to fund Indian chairs in important American, British and European Universities? And suppose they were to aggressively enter areas strongly associated with India like Yoga (which has been hijacked by American practioners), Ayurveda (ditto), Bollywood (it needs an international flavour), meditation techniques and the like? One Deepak Chopra and one B.K. Iyengar just aren't enough to cope with the galloping demand for all these in the U.S. alone.
The Government approach has been to give NRIs a few honours and a few sops like Dual Citizenship. What it needs to encourage is a far more active NRI participation in India's development. I hate to use the phrase, but it could be a win-win situation for all concerned. And we are all concerned.
Anil Dharker is a journalist, media critic and writer.
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