Should NRIs be given special treatment?

The Pravasi Bharatiya Divas, like most things Indian, could hardly keep itself away from controversy. A debate now rages on whether or not Non-Resident Indians deserve special treatment by the government.

Opinions differ, and not all reasons proffered for or against the idea are illogical.

Two such points of view follow:

S Balasubramaniam, Treasurer, American Association of Physicians of Indian Origin:

It is time that Non-Resident Indians were recognised as assets, not as a stigma. We were here for three days for the Pravasi Bharatiya Divas. In these three days, we were made very welcome, but as guests, not as members of the family.

The red carpet was laid out for us, but we were also told: "Swagatam, but we want you to say goodbye at the end of three days."

If this was not the case, shouldn't the secretariat of the Pravasi Bharatiya Divas have set up some kind of permanent secretariat or think-tank to listen to what NRIs have to say?

This was a wonderful meeting. It was a great place to network. But it typifies the 'official' Indian attitude to NRIs: "You left India and went away so it's your own fault you are guests. Give us your dollars and we'll tell you how to spend them."

Even at the conference, there was no exchange of ideas or thought processes. This was sad, because every person who came from abroad, brought wisdom and new ideas with him, having seen the world and thought: "How well this would work back home."

I would have thought this would have been the most important part of Pravasi Bharatiya Divas.

After all, when Gandhiji came back from South Africa, he did not bring dollars or pound sterlings with him. His return was important because he brought back a thought process. India can do that with its NRIs.

It makes it even harder to understand why, when it has so many problems, it wants NRIs to have a hands-off attitude.

I can talk about health, because health administration is what we deal with. At the healthcare symposium we heard all about the Apollo success story, the need for private sector involvement, alternate medicine and so on. But what about a health infrastructure for the common man?

In India, trauma is the biggest killer. India has the unenviable reputation for being the country with the highest death rate from road accidents, anywhere in the world.

The basic infrastructure in the United States is the result of a public-private partnership. We -- the Association of American Physicians of Indian Origin -- could have helped the health ministry in setting up a chain of hospitals with philanthropic help, with administrative systems that could have helped in dealing with trauma.

But we had a health minister attending the meeting who said that the problem of health was a responsibility of the state governments, not the Central government.

He couldn't give us thirty minutes to address the issues and left all the questions for his secretary to answer. No system of feedback was set up for us and it seemed no one wanted to listen to us either.

The other highlight of the Pravasi Bharatiya Divas was the prime minister's announcement of dual citizenship. What difference the announcement will make, I'm not sure. Visa issues and travel to and in India have improved tremendously in the last ten years. It has made life easier, because of the private sector. The tourist industry needs to be explored.

Indians abroad can give you enormously helpful suggestions on this -- how to make internal travel easier for the foreign tourist, hygienic places to stay that don't cost the earth.

Tourist departments outside India do not market India -- on the contrary, they provide you with reasons why you shouldn't travel to India.

Embassies and functionaries of the government of India abroad need to be made to become more sensitive to NRIs.

You are a guest in the country of your birth and a second-class citizen in its embassy. It is easier for me to talk to the Congressman from my area or the senator than to get through to the secretary to the Indian ambassador.

You need to open the doors of the Indian embassy to NRIs.

Indians should learn from the Jewish and the Chinese. Non-resident Jews and Chinese do a lot for their countries because they have confidence that their government will value their contribution.

Because they trust their government. The Indian government needs to win the trust of NRIs.

(As told to Aditi Phadnis)

*****

Arun Bharat Ram, vice-chairman, SRF Ltd:

I am against any favourable treatment to Non-Resident Indians.

After all, they have decided to go abroad and seek a living there. Why should any foreigner including NRIs be given tax breaks by the government which are different from others?

I am against sops by the government for any class of people, including NRIs. The rules ought to be the same for everybody. What have they done to get special treatment?

The colour of their money is the same as that of anybody else. I am for special sops only when such investments have been made with a non-profit motive into, say, schools.

NRIs complain and crib more than anyone else. They don't take into account that we are a democracy and, except for the last ten years, we have been functioning as a closed economy.

Opening up takes its own time. Even China hadn't moved so fast as India has in the first ten years of its opening up.

Both portfolio investment as well as foreign direct investment will happen not only from NRIs but from all class of investors only if an enabling environment is created.

I am an optimist and I think that the reforms will carry on because people want the reforms. Events like the recent Pravasi Bharatiya Divas will have no effect on NRI investments in the country. Unless we put our own house in order, we cannot expect them to invest in the country.

I think big NRIs like Laxmi Mittal are waiting for the right time to invest in India -- when it will be simple to get control of iron ore and coal mines.

He is not going to put his money in India unless he can be sure of getting returns, though the fact that India is one of the lowest-cost producers of steel in the world would not be lost on him.

A good example is NRI investment into infotech.

The environment for investment in this sector is much more conducive than manufacturing.

Many states like Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu have taken special steps to welcome investment in infotech. As it was a new area, the government did not have a plethora of restrictive rules.

India is a good place to invest in, not just for the cost advantage but also to get human resources especially intellectual capital. The NRIs have realised this and that is why they have invested in this area.

After infotech, there could be a lot of NRI investments, mainly by doctors, in services sectors like healthcare and medicine.

If you look at China, most overseas investment has been made by Chinese companies based in Taiwan and Hong Kong.

These companies have not invested out of love for their homeland but because of the attraction of low- cost manufacturing in China, which makes good economic sense.

These companies have made huge investments in low-cost and low-value sectors like toys, garments and low-end electrical gadgets. Anybody in the whole world makes an investment only if it makes business sense.

Their advantage was that they spoke the language and understood the system. In contrast, NRIs haven't found the space to make the same investments in India. But you can't blame the NRIs for not coming in large numbers.

There is no policy, no infrastructure to encourage investments from anybody and not just NRIs. Even resident Indian businessmen have made very small investments in the last ten years.

You also have to keep in mind that there was no entrepreneurial class in China when the country opened up its economy. So non-resident Chinese found ways and means of using the system to their advantage.

In India, there has always been a very strong entrepreneurial class. So, NRIs couldn't devise a system that would translate into favourable treatment for them.

Overseas Chinese, whether in Hong Kong, Taiwan, Malaysia or Thailand, are essentially businessmen. NRIs, in contrast, are by and large professionals. You can't expect professionals to invest in large numbers in a business in India.

So investment from them is more likely to be in the form of portfolio investment.

Again, that will happen only if India provides them with the best returns through buoyant stock and debt markets.

(As told to Bhupesh Bhandari)