Wednesday, October 7, 2009

India & GCC countries: Diaspora and Development


                                                     N. Shamnad [1]

Migration is an inevitable tendency in humans, one finds selectivity in migration in terms of their gender, age and qualification and have great impacts on social, economic and cultural dynamics in both the places of origin and destination. It gives birth to Diasporic community. «Diaspora» a Greek word meaning ‘dispersion’, refers to the various Jewish communities «living in exile outside Palestine». The term diaspora is now commonly used in a generic sense for communities of migrants living or settled permanently in other countries, aware of its origin and identity and maintaining varying degrees of linkages with the mother country. The term «Indian diaspora» describes the people who migrated from territories that are currently within the borders of the Republic of India. It also refers to their descendents. The diaspora is composed of NRIs, (Indian citizens not residing in India) and PIOs (persons of Indian origin, who have acquired the citizenship of some other country).

The Indian diaspora - perhaps the oldest diaspora in the world, third largest (20 million), spread in 110 countries of the world. In many parts of the world, Indian community has become an influential minority, one that is known for their professional accomplishments and entrepreneurial skills and seen as well-educated and well-earning group. In India, Indian diaspora are important agents of socio-economic and cultural change. They have also acted as catalyst in the process of strengthening India’s bilateral relations with the countries where they are residing. In the long run, this segment of the Indian family would play a vital role not merely on economic front but in activities related to cultural dimension, on diplomatic side in strengthening Indian ties with foreign nations and in enhancing the prestige of India at the global scale. Their role in above stated manner depends on the nature of contact between diasporic community and state, their families, remittances, investment, services and help by sponsoring the further migration of relatives and friends.

The Indian diaspora has some 20 million people worldwide who generate an annual income equal to 35 percent of India's gross domestic product. The NRI or non-resident Indian community, are popularly referred to as Envoys of Enterprise, account for an economic output of about $400 billion (Rs 19,20,000 crore). Hence, the significance of the participation of these communities in the development process of these countries cannot be undermined. Moreover, in the age of globalization, the importance of this Diaspora community is more visible. In support of the Hypothesis, 'In the case of the Indian Diaspora, migration of people has not resulted in 'Brain-Drain' but 'Gain'. Members of the Indian Diaspora (NRIs and PIOs) have significantly contributed towards the growth and development in India. The Indian Diaspora is an influential and valuable community contributing towards improved Indo-International relations, thus overall contributing towards 'gain' to the country. By proving the diaspora's contribution towards economic growth and development in India dominant theories of 'brain-drain' and 'migration of talent' do take a backseat.

Indians in the GCC Countries
The Gulf Cooperative Council (G.C.C.) states include Saudi Arabia, United Arab Emirates (UAE), Kuwait, Bahrain, Qatar and Oman. The bilateral trade between India and GCC countries had shown consistent increase with India’s exports to GCC amounting to US $ 7.02 billion and imports from GCC, excluding oil, at US $ 3.25 billion during 2003-04. In recent times, India’s traditional economic ties with GCC have become even stronger, especially due to increasing imports of oil and gas, growing trade and investment opportunities and presence of 6 million Indian workers in the region. The substantial oil and gas reserves of the GCC region play a vital role in fulfilling India’s energy needs and are integral to the country’s energy security. Today, however, Indo-GCC trade is not restricted to oil and petroleum products only; it is in fact extremely diversified. The UAE is the second largest importer of Indian goods, after the USA and Saudi Arabia is the 16th largest destination of Indian goods[2]. UAE's decision to open up the real estate sector and the stock market to expatriate investment has also triggered a rash of massive investments by NRIs in the local economy[3].
Entire GCC region is sparsely populated, Saudi Arabia being the only Gulf country with relatively large population of almost 25 million, respectively. As for the others, the corresponding figures range from barely half a million to about 3 [4]. Foreign nationals are not permitted to own any business or immovable property in the Gulf Countries. They are required to make a local citizen or entity a majority even if sleeping partner in their enterprises.
There is a huge population of Indians in the GCC countries. Most of the Indian diaspora moved to the Gulf after the oil boom in 1970s to work as labourers and for clerical jobs. Indians - all foreigners, in fact - in the Gulf do not normally become citizens however. They retain their Indian passports since most of the countries in the Gulf do not provide citizenship or permanent residency. One of the major reasons why Indians like to work in the Gulf is because it provides incomes many times over for the same type of job back in India and its geographical proximity to India. The Indian Diaspora makes up a good proportion of the working class in the GCC. The Indian Diaspora in the Gulf consists entirely of "non-resident Indian citizens" (Or NRIs). NRI population in these Gulf Cooperation Council countries is estimated to be around 6 million (2008-2009), of which over 2,500,000 stay in the UAE. Majority of them originate from Kerala, Andhra Pradesh, Karnataka and Tamil Nadu. Their numbers make impressive reading even in terms of their percentage of total population in the countries where they reside: Country - percentage of national population (1999)[5], Bahrain - 20% ; Kuwait - 13%; Oman - 15%; Qatar - 24%; Saudi Arabia -7% UAE -32%. However these figures are increasing day by day. For example, in 2005, about 40% of the population in the UAE were of Indian descent.
Semiskilled and unskilled workers still account for about 70% of the Indian migrants; while white-collar workers are in the neighbourhood of 20% and professionals (doctors, engineers, architects, bankers and charted accountants) have a 10% share of the total. The professional Indians and some of their white-collar workers are the only ones who qualify to have their families with them due to the high basic income norms set by the GCC Governments. To enjoy such a privilege in the UAE, for instance, the monthly earnings of an NRI must be no less than 4000 Dirhams (ca. Rs. 48000), or Dirhams 3000 plus accommodation. In Kuwait, the qualifying minimum is even higher, namely, Kuwaiti Dinars 400 (Rs. 56000) per month. The living and working condition of the unskilled and semi-skilled Indian workers in the Gulf leaves much to be desired. A majority of these NRIs are young males. Over 60% of them have had little formal education. On arrival in their country of destination in the Gulf, they are usually fed and housed in barrack-like tenements and engaged as labour on construction projects. Most of them are unmarried. There have been cases of Indian women who were recruited as cooks or housemaids and were driven to desperation because of the ill treatment and molestation that they were subjected to[6]. In view of the serious problems faced by housemaids, the Govt. of India had suspended their emigration to Kuwait in June 1999[7].
Interactions and contacts of Indian migrants with the local people are limited and mostly of a formal and impersonal nature. They are naturally drawn to their compatriots of a similar social status or background. A large number of Indian associations are thus to be found throughout the region, which are based on commonalties such as place of origin, religion, language or profession. As many as a hundred such associations engaged in cultural and recreational activities exist in Kuwait and UAE, while relatively smaller numbers exist in Saudi Arabia, Bahrain, Qatar and Oman. The Indian migrants have taken the initiative of setting up a large number of schools throughout the region which follow the Indian curriculum and thus meet the educational needs of their children. NRI population tends to save and remit considerable amount to their dependents in India. It is estimated such remittances may be over USD 23 billion per annum (including remittances by formal and informal channels in 2006-2007)[8]
Indian labour migration to the GCC Countries

Although Indians manned the clerical and technical positions of the oil compa­nies in the Gulf after oil was discovered in the region during the 1930s, the over­all numbers were still small. Between 1948 and the early 1970s, these numbers gradually increased from about 1,400 to 40,000. When large scale development activities started following the 1973 spurt in oil prices in the six Gulf Coopera­tion Council (GCC) countries of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the UAE, an upsurge in the flow of workers and labourers began from India to the Gulf. India and Pakistan supplied most of such unskilled labour, registering almost 200 percent growth between 1970 and 1975. In 1975, Indian expatriates constituted 39.1 percent, Pakistanis 58.1 percent, and other Asians 2.8 percent of the total non–Arab expatriates in the Gulf. Since then, Indian migration has overtaken that of Pakistan and other Asian countries of origin. Further, since the Kuwait war of 1990–91, Indians had replaced even the non–national Arabs in the Gulf, viz., the Jordanians, Yemenis, Palestinians and Egyptians. From less than 258,000 in 1975, migrant Indian population in the Gulf went up to 3.318 million in 2001, which is now estimated to have crossed 6 million.

Stocks of Indian Migrant Population in the GCC Countries, Selected years: 1975–2001[9]

Saudi Arabia

Changing perceptions about diaspora from India: «Brain drain» or «Brain gain»

The migration of the highly skilled from India to the developed countries was first seen as «brain drain» when the Nobel Prize of 1968 in medicine brought global recognition to gifted Indian scientist Har Gobind Khorana who had mi­grated to the United States and naturalized as an American citizen around that time. In fact, it was the Gulf war of 1990–91 that had woken up the Indian pol­icy makers about the vulnerability of its workers in the Gulf, and the importance of their remittances to the economy. However, with shifts in the paradigm of migration, it was the perception of high–skill emigration to developed countries which had changed much more dramatically than that on labour migration to the Gulf. Thus, in the mid–1980s, the political perception of «brain drain» had suddenly given way to the perception of «brain bank» abroad, a concept dear to Rajiv Gandhi when he took over as the prime minister of India in1984, after Indira Gandhi was assassinated. Through the 1990s, the gradual success and achievements of the Indian migrants in the US – particularly led by «body shopping» of the software professionals to the US from Bangalore, India’s Silicon Valley, and working towards averting the looming global crisis of Y2K – drew real attention of the developed countries in the West and the East alike . The paradigm shift in the perception about professional migrants leaving India, thus took place in phases – from the «brain drain» of the 1960s and 1970s to the «brain bank» of the 1980s and 1990s, and subsequently to «brain gain» in the twenty–first century[10].

Government measures and programmes for better migration management

There has been no systematic legal policy framework to deal with emigration out of the country. Despite the debates, discourses, and perspective, the Govern­ment of India does not have any comprehensive policy on labour migration or overseas employment. No documentation of international migration data exists in India, not to talk of its various sub–categories. There is indirect documentation of low–skilled emigration of workers in terms of their being ECR (Emigration Clearance Required) category of passport holders and as such from the number of clearances granted by the Protectorate of Emigrants, Government of India. The Emigration Act, 1983, which replaced the earlier 1922 Emigration Act, has been designed mainly to ensure protection to vulnerable categories of unskilled, and semi–skilled workers, and women going abroad to work as housemaids and domestic workers. Under the Act, it is mandatory for registration of all «Recruit­ing Agents» with the ministry. The govern­ment’s role has been perceived as that of a facilitator in finding gainful employ­ment to maximum number of persons, again a major development concern since India’s independence, whether within or outside the country.

The newly formed Ministry of Overseas Indian Affairs, constituted in 2004, has taken the initiative to amend the Emigration Act, 1983, and introduce a number of measures. «Overseas Indian», the house journal of the Ministry has been launched in five languages with an e–version also being made accessible. Of all the government measures and programmes in India, the Over­seas Citizenship of India (OCI) – the dual citizenship is an important landmark in redefining the contours of a migration policy in the new millennium. This mea­sure seems to be relevant mainly to the highly skilled migrants to the developed countries. A second measure, that Indian citizens abroad would have the right to exercise their votes from abroad, is primarily meant for the Indian workers in the Gulf – those who send large remittances back home but can never hope to become naturalized citizens of those countries because of restrictive regimes there. However, it is still too early to gauge the impact of these two measures as they are in their infancy. Government of India has also taken some innovative steps, which include introduction of a compulsory insurance scheme named "Pravasi Bharatiya Bima Yojana" for the jobseekers going abroad for employment purposes.

The Remittance to India

An important aspect of Indian labour migration to the Gulf has been its lion’s share in the remittances[11] sent home to India by the Indian diaspora. Beginning in the mid–1970s, there was rapid increase in remittances coming from the developed countries, but as migrants to these countries were gradually joined by their kith and kin, these were gradually overtaken by larger proportions coming from the Gulf. Global remittances to India reached a level of US $2,083 million in 1990–91, to US $8,112 million in 1994–95, US $11,875 million in 1997–98, to US $ 12,290 million in 1999–2000, and eventually to 21,700 million in 2004. In terms of share of GDP at market prices, these constituted 0.7 per cent in 1990–91, and 3.0 per cent in 1999–2000[12].

Thus, remittances sent by Indian diaspora have supposedly contributed positively to the Indian economy. In the middle of 1991, India faced a serious balance of payments crisis. Foreign exchange reserves had fallen to a level hardly adequate to meet essential imports for just a few weeks. The Indian migrants in the developed countries withdrew their dollar deposits from Indian banks at an alarming rate. These problems warranted immediate action for India to avoid defaulting on its international obligations or a collapse of its economy for want of critical imports. It was the slowly but steadily growing remittances from the Indian workers in the Gulf which saved the situation for India. Today India is at the top of the list of countries receiv­ing remittances from its migrants abroad, close to ten percent of the worldwide remittances sent home by 191 million migrants.

Diasporic remittance led to the removal of two kinds of poverty in India – the «poverty of education» and the «poverty of health». At the same time, remittances have led to the opening up of a large number of new schools and col­leges on the one hand, and to enabling the youth to buy a costly private education on the other hand – both contributing to unemployment amongst the current generations of Kerala youth who no longer want to work in traditional lines of occupations. Secondly, an equally important «adverse» ef­fect has been the emergence of «replacement migration» of labour into Kerala from the other Indian states. Apart from the fact that wages have gone up in Kerala to be highest in India due to shortage of unskilled and semi–skilled workers, labourers from other states also accept low wages and poor living conditions to work in Kerala, adding to unemployment of the local generations of youth.

Socio–Economic impact in India

How does one assess whether the Indian diaspora in the Gulf has changed society in India, and wheth­er it has adequately contributed to social and economic development in India? In other words, what have been the socio–economic gains and losses arising from migration and diasporic life? These questions have traditionally been raised in suggesting cost–benefit analysis at the micro–level for the individual migrant and the household, and at macro level for society and the economy as a whole.

  • Even if it is assumed that the micro–level assessment of benefits and losses to the households left behind in India can more accurately identify and mea­sure the benefits, there has not been many satisfactory surveys of the psychic losses that separation of family member brings, except for a few studies carried out in the state of Kerala. For example, emigration of married men who left be­hind the responsibility of the management of the household to women in the family, transformed about one million women into efficient home managers, but eventually also created the social and psychological problems of the «Gulf Wives» and the loneliness of the «Gulf Parents», who unlike the relatives of the skilled migrants to the developed countries were not accompanying the work­ers to their destination countries.[13]
  • Gender issue is another related but unattended facet of Indian migration. No comprehensive data are available on women migrants as dependents or workers, not to consider in–depth analyses of the trend and impacts. Analyses of the gender dimension of Indian migration have remained, by and large, either stereotypical or case–study based.
  • There have been no stud­ies on the impact of skilled migration on career choices and educational choices in India.
  • At the macro level, the attempts have not progressed beyond identifica­tion of the indicators, viz., remittances, transfer of technology, and human capi­tal embodied in returning migrants
  • It is indeed paradoxical that the average per–hour contribution of each employed worker within India to the production of India’s gross domestic product (GDP) has been amongst the lowest in the world – a mere 37 cents as compared to the United States’ 37 dollars, i.e., one–hundredth of the latter. This is naturally ironical, because the same average Indian employed abroad contributes very high average share to the GDP of the country where one settles and works [14] .
  • Historically, immigrant groups from various parts of India have sent "remittances" - small sums of money they transferred informally to their families back home for small projects in their hometowns. Many have also financed organisations dedicated to improving their communities in the native villages and surrounding areas.
  • Finding themselves alienated in a foreign land, with an exceptionally diverse social and cultural difference, Indians arriving on the shores of Gulf countries tend to live in close-knit groups, based on their communities or states of origin. Consequently, the South Indian community, which is one of the largest communities in the region, will find itself more strongly knit in this part of the world, than say, in any other area they would have migrated to in India. Similarly, the Sindhi community, predominantly a business community, and comprising the first Indians to set foot in the region, especially in the UAE – have developed an equally close knit social and cultural structure.
  • The funds Indian immigrants raise when they are faced with disasters of huge consequences taking place in their homeland - as was evident during the Gujarat earthquake and its aftermath - still far outnumbers their contribution made during the rest of the year, for normal charitable activities.

Indian Diaspora in GCC countries: The case of Kerala

The overseas Indian workers (OIWs) in the GCC Countries come mainly from the four states of Kerala, Tamil Nadu, Karnataka and Andhra Pradesh. However, most of them have originat­ed from Kerala. This had led to the establishment of a separate ministry for non–resident Keralites, and an international airport at Thiruvananthapuram. Compared to all India, Kerala contributed an average of 25 per cent of emigrants in 21st century, down from an average of 35 percent in the twentieth century. In other words, one out of every three or four Indians living in Gulf has been a Keralite. Towards the end of the nineties, Keralaites working abroad constituted 10 percent of the workforce in Kerala. The size of those working abroad now equals those working in the organised sector (both public and private) in Kerala. According to unofficial estimates, nearly 20 lakh people from Kerala are currently working in various West Asian and North African countries[15].

The 2001 census put Kerala's population at 31.8 million. Non-resident Keralites (NRKs) send back close to US$8 billion in remittances annually, more than double the state's tax revenues. Migration has provided the single most dynamic factor in the otherwise dismal scenario of Kerala in the last quarter of the twentieth century. In Kerala, migration must have contributed more to poverty alleviation than any other factor including agrarian reforms, trade union activities and social welfare legislation [16]. One important negative effect has been the rise in unemployment rate due to education and «replacement migration» into Kerala from other Indian states. Emigration had a role in increasing the population with higher levels of education by boosting the willingness and the ability of the Keralite youth to acquire more education. Due to demonstration effect, a common aspiration is «to emigrate to the Gulf, earn a lot of money, get married, and live happily ever after». In recent years, many countries in the Gulf have made it mandatory to have secondary level education for migrants to enter. This has led to considerable increase in the demand for secondary level education in Kerala.

Workers Granted Emigration Clearance of Government of India, by Major Indian States, 2000–2005[17]

Tamil Nadu
A. Pradesh

Kerala’s share in attracting remittances from overseas Indian workers has not been insignificant. A study conducted in 2003 has estimated the total remittances to Kerala households based on their survey carried out in 1998 in each of the districts. According to their estimates, total remittances to Kerala stood at Rs. 35,304 million, representing an average remittance of Rs 25,000 per emigrant, and a per capita receipt of Rs. 1,105 by the state population. As a rough propor­tion of Kerala’s State Domestic product, this was close to 10 percent. They also constituted about 10 percent of the country’s aggregate remittances of US$12,000 million in 1998 at an exchange rate of approximately Rs. 33 to a dollar. Remittance flows to India are estimated to have reached $45 billion in 2008, compared to earlier estimates of $30 billion.

About two million people from Kerala work abroad, almost 90% of whom are in the Gulf. Many are poor, semi-skilled labourers who have taken loans of up to £2,000, often from moneylenders, to pay recruitment agents for overseas jobs. They work 12-hour days, live without their families in harsh conditions, earn between £500-£1,000 a month, and send most of the money home. According to Pravasi Bandhu Welfare Trust, a UAE-based charitable organization working for the welfare of expatriate Indians, NRKs have remitted more than US$42 billion to Kerala in the last 35 years. Weekly newsmagazine India Today reports that non-resident external deposits with Kerala banks, which were US$6.73 billion in June 2008, are expected to cross US$7.39 billion by June 2009[18]. The remittance income from abroad to the Kerala economy is of two types: (i) remittances through legal channels, and (ii) remittances through illegal channels. However, the incentive to send money through illegal channels seems to have reduced with the liberalisation of the exchange rate since 1991. It is now widely acknowledged that foreign remittances in the economy of the State of Kerala in India in the form of money sent by its workers in the Gulf countries play a crucial role. By the early nineties remittances to the Kerala economy assumed a significant share of state income. This ranged from 17 percent during 1991-92 and 24 percent during 1997-98 with an average of 22 percent for the second half of the nineties. The liberalisation of the Indian economic policies, particularly the foreign exchange rate, benefited Kerala directly. Adding the remittance income to the Net State Domestic Product, a Modified State Income series has been constructed. As a result Kerala’s per capita income not only caught up with the average per capita income for India but started exceeding it reaching 49 percent above the national average by the end of the nineties. This tallies with per capita consumer expenditure in Kerala, which was in excess of 41 percent above the national average by the end of the nineties.

Remittances have also made significant impact on savings. By the nineties savings rates in the Kerala economy seem to have reached such high levels comparable to the East and South East Asian countries[19]. Average propensity to consume declined as income increased steadily. This helped the savings rate to increase and reach high levels comparable to East and South East Asian countries during the nineties. The challenge before Kerala now is to translate such high rates of savings (also reflected in high growth rates in bank deposits and a low credit-deposit ratio of around 40 percent) into investment so as to accelerate not merely aggregate growth of the economy but more importantly, in employment growth. While there are signs of some decline in unemployment in Kerala during the nineties, the rate of unemployment is still high compared to the national average. Majority of the unemployed in Kerala are of the educated kind and this poses both an opportunity as well as a challenge to the Kerala society.

The increase in per capita income as a result of remittances helped increase the consumption of the people in Kerala, including on enhanced family investment in education for migration. The average per capita consumer expenditure in Kerala was below the national average till 1977-78. Since then per capita consumer expenditure in Kerala exceeded that of India progressively reaching 41 percent above the national average in 1999-00. Kerala’s modified per capita income (PMSI) caught up with that of the national average only in 1984-85 but reached 49 percent above the national average in 1999-00. The delay in catching up with the national average in per capita income might be a reflection of the remittances through illegal channels. However, consumerism and house building activities have drained the state of the development potential of its remittance receipts, leading many families to financial bankruptcy, even to suicides. Apart from this, the increas­ing economic and political clout of the «new rich» in Kerala is reported to have created a climate of resentment against them among the other sections of society [20].
Reverse Exodus of the Diaspora

In 2009, the number of Indian workers in the GCC countries reached a high of 6 million. Of those about 60 per cent worked in the construction field. It is estimated that more than 2,00,000 workers in the Gulf have returned to India as a result of the delay in execution of projects due to international economic slowdown and recession. Indian professionals in the western countries like Germany, Canada and Britain have not shown any such trend of mass home return, despite these economies going into recession. The World Bank estimates that the biggest declines in the flow of migrant money next year are expected in the Middle East and North Africa because of economic slowdowns in the Gulf and Europe.

Several of these workers have returned to India only temporarily, that is, on leave without pay and expect to go back once the economy revives and projects restarted. At the same time, Many other workers in GCC countries return to India on cancelled visas or after finishing their jobs, not those on leave. The Minister of Overseas Indian Affairs, Mr. Vayalar Ravi, said in the Indian parliament that until 2007, 50,000 to 150,000 workers returned annually to India from Gulf countries after completing their contracts, which run from three to five years. The workers in the United Arab Emirates seemed to be most affected. The Indian embassy in the UAE could not give precise figures of returnees, but indicated that the number was very large. The most visible impact on the construction industry appears to be in the emirate of Dubai. The job opportunities in Dubai were primarily in construction, while in the other countries and emirates, the job opportunities were more broad-based, covering wider spectrum of industry, including oil and gas and related ancillaries. This year, Proleads, a Dubai based property consultancy, estimated that 45 per cent of the country’s building projects had been delayed. Companies cut jobs, particularly in the real estate sector, which had been booming to the tune of around $2 trillion till recent times. With the global financial crisis sparked by the credit crunch in the West having reduced fuel demand, oil prices have fallen to below $35 a barrel. This after oil prices touched highs of over $140 a barrel last summer[21].

The union ministry for Over seas Indian Affairs has sought the states to furnish details of those retuned from Gulf countries due to financial recession. The information is being collected as part of conducting study to found out how much the recession affected the returnees. The Indian Council of Overseas Employments (ICOE) has the responsibility of the study, which would be completed by July 2009[22]. Some 200,000 to 500,000 Keralites working in the Gulf are likely to return home by July 2009, state finance minister T.M. Thomas Isaac told the State Assembly[23]. This is a considerable chunk of the estimated two million-plus Keralites working abroad, nearly 90% of them in the Gulf. The 2001 census put Kerala's population at 31.8 million. Non-resident Keralites (NRKs) send back close to US$8 billion in remittances annually, more than double the state's tax revenues. The impact of the reverse exodus - both economically and socially - could be devastating, according to experts. According to the Centre for Developmental Studies, Thiruvananthapuram, the number of emigrants from Kerala in 2008 was 2.16 million, up from 1.84 million in 2003. The number of return emigrants was 1.1 million in 2008, up from 890,000 in 2003. So return emigration rose 210,000. Fore example, Around 1,500 to 2,000 fishermen from the Kerala Taluk, Sakthikulangara were employed in prestigious sea reclamation projects in the UAE, such as Palm Island, Due to the recession, almost 90% are back[24]. However, the government’s biggest problem in fleshing out the fund is that there is no official estimate of how many people are returning every week. Though the government has a separate department to cater to these NRKs (NORKA), it has only a vague idea about the numbers returning from the gulf [25]. The International Labour Organisation, a specialised agency of the United Nations that deals with labour issues, is likely to send a fact-finding mission to Thrissur in Kerala to assess the number of jobless returnees from abroad and the impact of the global economic downturn on NRI remittances. Thrissur has been one of the districts to immediately launch an NRI returnees rehabilitation programme as recession began affecting jobs. About 700 returnees have registered their names with the rehabilitation cell. Migrants from Thrissur district constitute 9.7 per cent of the total number in the State, according to 2004 figures. Every 100 households in Thrissur have 27 migrants and 13 returnees[26]. About 88 per cent of the emigrants are less than 40 years.

No fiscal help is being offered to those returning to India, although the government is considering a proposal to establish an aid fund. A separate programme helping former expatriates to transfer their skills to jobs that may be available in India. The ministry of Overseas Indian Affairs was expecting a budgetary support of Rs.100 crore for setting up a fund for returning Indian workers but the request could not be accommodated in the union budget of 2009.
Kerala, the home state of many expatriate workers, has set up a loan package to help returnees start small businesses from their homes. Kerala Finance Minister T.M. Thomas Isaac has said that the State government will examine the possibility of setting up a financial mechanism for providing loans to the gulf returnees interest-free for starting their own employment ventures along the ‘Islamic banking’ principles. The state budget, 2009 allotted Rs. 100 crore. for providing soft loans to Gulf returnees.[27] The state-owned Kerala Financial Corporation (KFC) will handle the package for Gulf returnees. The KFC will provide entrepreneurial loans at a low interest rate of seven per cent to those returning from the Gulf countries after losing job in the wake of the ongoing economic slowdown. The target is to provide Rs 100 crore under the scheme. KFC will evolve a mechanism to impart technical and managerial skills to such Gulf returning entrepreneurs. The corporation has already constituted to an expert team for the purpose at an informal level[28]. The state of Kerala has also sought the Gulf Cooperation Council's (GCC) help to rehabilitate thousands of Gulf returnees, who lost their jobs in the wake of the global slowdown, by contributing to the fund which the state government has already set up.[29]

India has drawn disproportionately high worldwide attention to the success sto­ries of its highly skilled human resources doing remarkably well in the developed countries. In contrast, the Indian labour diaspora in the Gulf have been consid­ered more of a responsibility than pride for India. To neutralise this imbalance and empower the Indian labour migrants, the interest of the stakeholders in the Gulf are gradually being looked into, and innovative programmes are being introduced. The developments following the institution of the «Pravasi Bhartiya Divas» (Expatriate Indians Day) and constitution of a separate ministry of the government of India reflect a break from the past – a confidence emanating from a paradigm shift towards India taking pride in its diaspora, and vice–versa. What is required, however, is a long–term policy that is aimed at establish­ing India’s links with the Indian diaspora for sustainable socio–economic devel­opment in the country. An effective mechanism is required to cater to the rehabilitation of the gulf returnees also.


  1. Business Standard, Monday, Jul 06, 2009, 
  2. http:// , Report of High Level committee submitted to Govt of India on Indian Diaspora in the Gulf States
  8. «Indian Diaspora in the Gulf States Region»
  13. Kannan, K.P. and Hari, K.S., (2002), Kerala’s Gulf Connection: Emigration, Remittances and their Macroeconomic Impact 1972-2000
  14. Khadria, (2002), «Skilled Labour Migration from Developing Countries: Study on India», International Migration Papers 49
  15. Khadria, Binod (2006), India: Skilled Migration to developed countries, Labour migration to Gulf.
  16. Malayala Manorama, Wednesday, July 22, 2009
  17. Mathrubhumi online Saturday, August 23, 2008
  18. Rajan, I. S. (2003), «Dynamics of International Migration from India: Its Economic and Social Implications»
  19. Rajan, I. S. (2003), «Dynamics of International Migration from India: Its Economic and Social Implications», Centre for Development Studies, Thiruvananthapuram.
  20. Reserve Bank of India, Report on Currency and Finance, various years
  21. The Guardian, Monday 6 April 2009,
  22. The Hindu business line, Thursday, Jun 04, 2009
  23. The Hindu, Saturday, May 30, 2009,
  24. Zachariah K.C., Mathew, E. T. and Rajan, S. I,  (2000), «Social, Economic and Demo­graphic Consequences of Migration in Kerala»,
  25. Zachariah, K. C. and Rajan, S. I., (2004), «Gulf Revisited», Working Paper Series 363, Centre for Development Studies, Thiruvananthapuram

[1]  Department of Arabic, University College, Thiruvananthapuram, Kerala, India.
[5]   http:// , Report of High Level committee submitted to Govt of India on Indian Diaspora in the Gulf States Region.
[7] «Indian Diaspora in the Gulf States Region»
[9]  Rajan, I. S. (2003), «Dynamics of International Migration from India: Its Economic and Social Implications»

[10]  Binod  khadria, (2006), India: Skilled Migration to developed countries, Labour migration to Gulf, P 21.
[11]   Remittances are officially known as Private Transfer Payments in India’s Balance of Payments Accounts.
[12]   Reserve Bank of India, Report on Currency and Finance, various years
[13]  Zachariah, K. C. and Rajan, S. I., (2004), «Gulf Revisited», Working Paper Series 363, Centre for Development Studies, Thiruvananthapuram.
[14]   Khadria, (2002), «Skilled Labour Migration from Developing Countries: Study on India», International Migration Papers 49, International Labour Office, Ge­neva.

[16]     Zachariah K.C., Mathew, E. T. and Rajan, S. I,  (2000), «Social, Economic and Demo­graphic Consequences of Migration in Kerala», Working Paper Series 303, Centre for Development Studies, Thiruvananthapuram.
[17]   Binod  khadria, (2006), India: Skilled Migration to developed countries, Labour migration to Gulf, P 17.
[19]   Kannan, K.P. and Hari, K.S., (2002), Kerala’s Gulf Connection: Emigration, Remittances and their Macroeconomic Impact 1972-2000, P 4, Centre for Development Studies, Thiruvananthapuram.
[20]   Rajan, I. S. (2003), «Dynamics of International Migration from India: Its Economic and Social Implications», Centre for Development Studies, Thiruvananthapuram.

[22]   Mathrubhumi online Saturday, August 23, 2008
[25]  Business Standard Monday, Jul 06, 2009. 
[26]  The Hindu, Saturday, May 30, 2009,
[28]  The Hindu business line, Thursday, Jun 04, 2009
[29]   Malayala Manorama, Wednesday, July 22, 2009

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