NRIs earn hard their kins spend smooth

KOZHIKODE, Feb 18: Non-Resident Indians struggle hard to earn while their dependents live cosily to spend, if the studies on the spending pattern of NRI remittances are any indication.

While most of the NRI income is spent on improving family lifestyle back home, only two per cent of their remittance form family savings, according to a study conducted recently by Pravasi Bandhu, an NRI welfare trust, among middle income groups in the Gulf region, which accounted for 65 per cent of the total remittance to the country.

Bringing out some distressing factors, the study also showed that 34 per cent of them had no savings at all, either at hand or back home. And hence only five per cent of them hope to maintain a comfortable life on their return.

The survey, participated mostly by those from Kerala (75 per cent), working in the Middle East, also found that most of their hard-earned money was spent on fancy homes and bungalows, leaving very little for the future.

According to the latest economic survey, the NRE deposits with scheduled banks in India increased from Rs 2,304 crore in 1991 to Rs 28,871 crore in June 2003, registering a growth of 12.53 times. The total cash remittances received by Kerala households alone during 1998 was Rs 35.304 million.

"Gulf NRIs are earning and their dependents at home are spending without knowing the real picture of the hardships abroad. These NRIs never inform their situation to the dependents while they even sacrifice minimum necessities. And some times, when they come back, they don’t get even love from their dear ones," says Trust Chairman K V Shamsudheen, who has been in the Gulf from 1970.

According to estimates, the number of returned emigrants in Kerala is about 7,50,000, with 40 per cent of them from Saudi Arabia.

Pointing to the spending pattern, 98 per cent of the participants agreed that their family life style, back home, had improved drastically after a member went abroad.

Only ten per cent live with their families abroad while the rest leave behind their kin at home and interestingly, 80 per cent of them are married.

Nearly 10,100 NRIs took part in the survey by the Pravasi Bandhu, held directly and through online.

Though only two per cent of their money sent home was saved for future, about 23 per cent of the NRIs choose to keep something as their own savings.

The spending pattern of Kerala emigrants shows that capital investment by more than 64 per cent of the households is Rs 25,000 or less, while about 22 per cent invest upto Rs one lakh and less than four per cent invest above Rs five lakh.

"Almost all their foreign savings are used up for subsistence, buying land, constructing houses, paying dowries, and paying back their debts. A major portion is also spent on the professional education of their children outside the state," business analyst Krishnamurthy Vijayan said.

The lavish spending by the families also portends night marish impacts. "While returning home, these individuals find it difficult to maintain the lifestyle, they and their families are used to, resulting in loss of status and self-respect," he says.

"The findings should change the NRI attitude to money management. They must take their families into confidence, making them aware of the hardships faced abroad and the need to save while controlling the expenditure. The hardwork should be converted into profitable investment," say the leaders of Pravasi Bandhu, which has been guiding NRIs on money management.

As part of its activities, they have formed 200 small saving groups with upto 100 members each, who save a fixed amount every month. Lectures and training sessions are held to spread awareness on the matter. (UNI)