View Point: Help NRI

Central Chronicle

Editorial

Posted On Thursday, July 16, 2009
Pravasi Bandhu Welfare Trust is a charitable organization working for welfare of Non Resident Indians (NRIs) by giving then awareness and guidance on saving and investment and to present various issues faced by NRIs to the authorities concerned. Indian workers abroad sent home $27 billion in 2007 to make India the top receiver of migrant remittances, according to the latest World Bank data released in March 2008. In 2008 it went up to $32 billion and in 2009 it again increased to $42 billion. Main source of this remittance is the lower and middle income Indian workers in the Middle East with its estimated five million NRI workers. The NRI remittances are over three times of the Foreign Direct Investment (FDI) to India. We believe the Indian government should look after NRIs more than FDIs. Indians working abroad must be considered as Human Resource Export. Foreign Direct Investors, Foreign Institutional Investors and exporters are getting red carpet welcome and many incentives from the government. But NRIs are not getting any assistance or support; we could not understand why Government India is neglecting NRIs who earn substantial foreign currency to the country.

According to the estimate of Ministry of Overseas Indian Affairs, 500,000 Indians will come back from abroad as a result of world economic recession. Most of the people returning from Middle East are unskilled, semi skilled and skilled workers with low wages. They are getting termination notice before they settle down. Majority of them had huge loan commitment at home and abroad when they are loosing job. Many of them are returning back with bad health condition and lack financial Resources, with the assistance of various NGOs and philanthropists. This kind of return of NRIs is an on going process; from UAE alone more than 1000 people are repatriated every year.

Even before recession this kind of situation was prevailing. They need some kind of rehabilitation arrangements from government.

1. Permanent Fund For the Assistance to Deserving NRI Returnees:

We request the Finance Ministry to approve the proposal of Ministry of Overseas India Affairs to allocate Rs 100 crores for the rehabilitation and assistance to the deserving Returnees from abroad as we mentioned above.

2. Introduce Systematic Investment Plan to Create Financial Stability After Return from Abroad:

When we conduct a survey among more than 10,000 low and middle income NRIs, we found only 5% had financial stability to continue present life style when they return back to India. That is because of blind spending of the earning from abroad by the dependents of NRIs and NRIs them self. Pravasi Bandhu is creating awareness on saving and investment through more than 179 interactive workshops, weekly radio programs, etc. The solution is introduction of Provident Fund type of compulsory saving and investment by the NRIs for better future. NRIs could give standing instruction to the bank where they have NRE account to transfer a small sum to provident fund. If a person who lived abroad for 30 years and he was saving Rs. 1000 every month and will be getting at least 7% return he would have more than Rs 12 lakhs. Where as majority of NRIs from this segment is not having any saving?

3. Exempt Short Term Capital Gain Tax to NRIs:

Today the FIIs are exempted from capital gain tax because they all are registered in countries which have double taxation treaty benefit which help to avoid the short term capital gain tax. They invest in India, at the opportune time they will repatriate the capital and profit to their home. Where as NRIs will be in India for ever.

We appeal to government of India to extend the exemption of short term capital gain to NRIs as well, which attract good inflow of investment from NRIs to India. KV Shamsudheen