This was reflected in advancing projects whether through government arrangements or private commercial deals related to Make in India, Skill India, Digital India, Start Up India as well as those aimed at improving our infrastructure and transportation links and fostering all round sustainable development in urban or energy sectors. Pravasi-friendly Policies. The government continued to accord high priority for safeguarding the biggest asset, NRIs with a slew of initiatives and policies. The Ministry continued to improve the institutional framework towards ensuring a safe, orderly, legal and humane migration process.
One of the priority areas was to strengthen the eco-system that supports migrant workers in all stages of migration cycle — pre-departure, in countries of destination, as well as on return. New initiatives were launched towards skills upgradation and certification of vocational skills of Indian emigrant workers.
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The Pravasi Bhartiya Kendra has been established to commemorate the trials and tribulations, as well as the subsequent evolution and achievements of the diverse Indian diaspora. Presently working as a media consultant. However, once the government started re-engaging its diaspora, demands began gaining ground that diasporic Indians should be distinguished from other foreigners. In December , parliament unanimously passed a bill to amend the Citizenship Act. OCIs were now on par with the NRIs in various aspects, including travel, investment, education and property.
Another significant step by the government to foster the feeling of belonging in Indians outside India was by granting voting rights to Indian passport holders staying abroad; this was done by passing the Representation of Peoples Amendment Act This amendment allowed the NRIs to get their names included on the electoral roles, thereby enabling them to participate in electoral processes in India. Interventions in the economic sector were also necessary as the government had to overcome a lack of trust among diasporic Indians based on their previous experiences in the country—cheating, fraud, cumbersome bureaucracy, corruption—and to ensure that financial transfers and property rights flowing from their investments were well protected.
These initiatives were primarily of two types: first, creating certain institutions to facilitate the exchanges and involvement of the diaspora and to protect their interests; and second, initiatives related to fiscal measures.
The government was already pursuing a policy of incentives and liberal norms conducive for the diaspora, such as higher interest rates on monetary deposits. However, considering the ambitious schemes of diasporic economic involvement that the government was envisioning, several facilitating and coordinating agencies were urgently required. However, as noted earlier in this study, the capacities and interest of people of Indian origin worldwide vary enormously according to their class composition and their location. These forms range from levels of personal family ties to business ventures involving international financial markets.
A review of the responses of people of Indian origin underlines the complexity of their different historical trajectories in their different territorial and temporal locations. This diverse community cannot be bundled together and presented as a homogenising singular block called the Indian diaspora. It is evident that the descendants of Indian immigrants have not responded to calls by India to invest in its economic development.
This diaspora cannot be labelled as the lost children of India. Remittances help reduce poverty, increase smaller business investments, contribute to higher expenditure on health and education, and build up human and financial capital. Remittances occur in two forms: direct fund transfer from a person abroad to one in India who is usually from the subaltern class; and local withdrawals from NRI accounts held by elite and professional segments of society.
India has emerged as the top country in terms of inflow of remittances, receiving The initial primary source of these remittances was the Gulf. Later North America replaced the Gulf as the most important source of remittances. However, in —12, a sharp decline from North America was registered with a modest increase from the Gulf, making the latter the highest contributor, though by a modest margin.
According to a report, While evaluating the impact of remittances, the foremost issue is the utilisation pattern. Other important factors are size and frequency of remittances. Higher use of remittances for consumption means reduced capital formation.
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Frequent remittances of a lesser amount indicate that the money transferred is used for family maintenance while less frequent and a larger amount of remittances suggests that they are for investment purposes. Figure 3.
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Average utilisation pattern of remittances in India. Figure 4. An interesting feature of remittance flow was regional distribution, which has been termed the pocket pattern. Even within Kerala, three districts, namely Thiruvananthapuram It continued to fluctuate between 3. Steven Vertovec Vertovec, Steven Transnationalism. Delhi: Oxford University Press note that remittances induce higher consumption spending, inflation in the price of land, housing and food, disparities between remittance receivers and non-receivers, and eventually a culture of economic dependency.
The primary reason for this was attributed to the swelling volumes of remittances in Kerala. Meanwhile, in mega-cities such as Delhi and Mumbai the increase was 3. This should not undermine the fact that even the most basic consumption activities have a multiplier effect on development, though this is strictly limited. The immediate direct impact of remittances is poverty reduction, but as it occurs in India, it is leading to overdependence on this inflow of funds from abroad.
Since emigrants are not able to accumulate capital to generate income at home, they are forced to stay abroad, even if under distress. While the Indian government has been successful in mobilising the remittances from the diaspora, the bigger challenge is to capitalise on this for a sustainable form of socio-economic development.
The financial engagement of the Indian diaspora through FDI has been modest compared with the money they have remitted. The share of Indian diaspora in the total FDI has never been very significant compared with the situation in China. However, there was a marked increase, with intermittent decline, in the FDI following liberalisation of the economy. In the initial years after liberalisation, the unfavourable regulatory regime and the hostility by the indigenous capitalist class were possible reasons for low FDI, particularly by the Indian diaspora.
In recent years, some of the leading business moguls of Indian origin such as Laxmi Nivas Mittal of British-based steel-producing giant Arcelor Mittal and Anil Agarwal of British-based Vedanta have started or have proposed to initiate massive FDI, primarily in sectors related to mining and metal. These initiatives have raised serious concerns about the human and ecological costs of these initiatives and have been opposed by a cross section of the Indian population.
The only exceptions are the IT and services sectors where diasporic entrepreneurs have played an important role through FDI and technology transfer. Owing to certain ideological and structural issues, FDI in India remains a controversial issue and this has seriously limited its utilisation as a channel for financial engagement with the India diaspora. Interesting, and which raises serious issues regarding abuse of the taxation treaty, is that almost all of these investments come from a single building with 12 storeys, situated at 1, Cathedral Square, Port Louis; this raised serious concerns about round tripping of money.
Philanthropy is a significant site of diasporic engagement and considered to have more long-lasting developmental impacts than direct remittances.
A number of the Indian diaspora have established charities and run health services and education and public works projects in their home towns. Recognising the limitations of small individual forms of engagement, a recent trend is one where individuals are pooling their resources for larger philanthropic projects such as setting up of the American-India Foundation AIF , funded by US citizens of Indian origin. The negative side of diaspora philanthropy, however, is that it is driven by notions of belonging in the Indian diaspora involving region, religion, caste and ethnicity.
Such philanthropy therefore has limitations in the efficacy of its forms of engagement. It has also led to sectarian divides and regional imbalances. Other academics have questioned the very genuineness of these initiatives:. For diasporans, achievements of wealth and status are hollow unless they can display them before an audience living elsewhere, at home … This means, in effect, that diasporans must constantly confront their invisibility through active acts of mobilisation and hospitality, and through public demonstrations of generosity which reach out beyond their locally constituted territorial communities.
The government has made proactive efforts to engage these communities, and people of Indian origin abroad have responded to these initiatives, making significant contributions in several tangible and intangible forms. A close review of this debate about diaspora and development and development through diaspora indicates two crucial points: first, a very strong penchant for the elite classes of diaspora, or the dollar diaspora, to invest in India; and second, that there are several missing links in this narrative. The first missing link is the callous failure of the Indian government to make a distinction between first generation migrants who may return to India or in the case of the Gulf, have to return to India and the descendants of emigrants from India born and bred as citizens of other countries.
Another such missing link is the exploitation of this diaspora in their destinations, particularly in the Gulf, which includes severe restrictions on employment, personal life, withholding of passports, etc. The cost of emigration is very high an average of about Rs57, , which many of the intending emigrants cannot afford. They therefore fall into the trap of moneylenders, which substantially reduces the benefits of earning abroad, while creating difficulties, even extreme hardships, for families back home.
The third missing link is the hype about employment generation. In development planning, an overestimation of the economic potential of investments by the India diaspora and the copious concessions made to them without cautious checks may result in manipulation of these policies. One such case is that of FDI from Mauritius. A careful evaluation is also required of the extent to which these economic responses by this diaspora are the outcome of policies oriented towards them or because of the general macroeconomic reforms India has been pursuing over the past two decades.
Perhaps, it will also take care of the lopsided representation of the Indian diaspora which is spread over countries; this year the largest delegations were from Malaysia, Mauritius and the Reunion Islands. While autonomy may infuse enthusiasm among the delegates for the next NRI convention, they will have to continue to wait for the unfulfilled promises to become a reality. The silver lining: OCI cards. Abdul Kalam centre with the NRIs. Satinath Choudary.
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