What NRIs Can Do

EDITORIAL
Posted on 2008-08-14
IT would be a good idea to have NRIs on corporate boards in India in order to profit from their expertise. The idea was suggested by successful NRIs recently to the Commissioner of NRI Affairs, Mr Eduardo Faleiro, and should hopefully receive a positive response from central and state governments. Although some might say there is no dearth of expertise in this country, we have to admit that the NRIs work in a far developed and organised environment, especially those in the western countries and are in possession of better expertise and knowledge in their fields – be it industry, research or professions. Their inputs can only improve our systems.
Why only expertise? They can go still further. They can involve themselves in investment. However, we must remember what the eminent NRI economist based in the UK, Lord Meghnad Desai says, “Emotion has no place in the investment decisions of NRIs. They invest in India if they find returns attractive.” India has been celebrating ‘Pravasi Diwas’ every year to rally NRIs and recognise and honour their services. Goa has been holding its own NRI conventions. These are good for emotional bonds and emotional bonds are good because they act as the foundation. Say, if India can create an attractive atmosphere and package for NRI investment and if China provides similar attractions, NRIs would invest in India and not in China because emotional bonds with the land of birth or land of ancestors’ birth makes the foundation.
There are over 25 million NRIs across the world. However, FDI from them remains low, compared to what expats send to China. In recent times, FDI flow from NRIs has increased, but in the real estate sector, not in industries and services. Higher rate of return in real estate and projects that comply with international standards and greater affordability are driving the NRI segment growth in the real estate sector.
If the NRIs are to participate actively in the growth story of India, they should diversify their options. Let both India and the NRIs do serious business: let the country provide good investment opportunities and let NRIs invest in the economic growth of India. Most of the foreign remittances that come to India are from workers engaged in odd jobs. Of the $24.6 billion that India received during the last fiscal year in foreign remittances, nearly half came from just five million NRIs in the Gulf, particularly from people from Kerala. India received $16 billion as FDI during this period. In contrast China received a sum of $23 billion during the same period.
There are all classes and categories of NRIs. Some, like odd workers will send remittances; the professionals could render expert advice as directors of boards of companies; the entrepreneurs or investment-minded ones could make their investments in already existing industries or set up their own or joint ventures; and the philanthropically oriented ones could set up organisations that can help vulnerable and neglected sections of society.