Must for descriptive Kerala PSC exams, Contribution of Non Resident Keralites in Economy

Contribution of Non Resident Keralites in Economy

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The immigration from Kerala has been a long process, generations relied on this "hope" to survive in life. The NR deposits could be channelized properly from 1980's, thanks to the banking system.The below data provides a clear understanding about the Non resident Indian diaspora

Source: study by PEACE Trust
The all India figures of Non resident Indians deposit testify for the influence of this inflow on our economy.It
is estimated that US$ 32.5 billion has been amassed in Indian banks in the form of NRI deposits in 2003.The latest figures in 2011 pegs totalwealth of NRI to be around $1 trillion, equivalent to the size of our GDP.

Source:DIPP Monthly reports on FDI

A newspaper reported said "Indians abroad hold a combined wealth of a trillion dollars in cash assets, real estate, gold, and art. Most NRIs obtain wealth management services from overseas - according to the High Powered Expert Committee report, these services, if provided in India could open up an opportunity to manage the personal assets of NRIs worth USD 8-10 trillion annually."
Even though the total wealth among NRI population is huge, the majority of Kerala immigrants are unskilled labourers and hence receive only marginal benefits through their migration. Despite that, there is no argument over the fact that these unskilled migrants were better off in the last three decades compared to the employment opportunity available in the state. One data points to less than Rs.5000 average monthly remittance from non resident Keralites in the gulf region.
And the perception among people of Kerala regarding the "Gulf" income, has been as one received with out much effort and hence the income stream were used for conspicuous consumption needs than for triggering any productive activity. This has even resulted in creating economic pressure on localy employed population who couldn't match the conspicuous consumption of NRIs.
Nevertheless, immigration to other states and countries by Keralites has helped the state as a whole to tide over many economic crisis.
The article in Malayala Manorama daily (Dec.27, 2007) claimed that about 1.8 million Malayalees (5% of the population) live outside India and that they had sent INR 64000 cr ($16 billion) to Kerala in 2006. It was three times the budget of Kerala (INR 21,000 cr; $5. 28 billion), and also half the total NRI (Non-Resident Indians) remittance to India.

Another study points out that, according to the figures available from the Department of Economics and Statistics, Government of Kerala, 11.41 lakh persons have out-migrated from Kerala. It is also estimated that, due to a number of reasons, 543700 have returned from foreign countries and have settled in Kerala during the last few years. The NRE deposits with the banking system in Kerala is estimated as Rs. 20045 crores, which is waiting to be utilized in productive activities. Formation of social capital has taken place significantly with the active support of the government. However, the capability of social capital to contribute positively for livelihoods and enterprises is much limited. Therefore, it is important to cultivate a better understanding among different stakeholders in the economic development of the State, using the human and financial resources of the return migrants.
A study by Jeffey sachs points out-
"Kerala is one of the biggest recipient states of remittances from Keralite workers abroad (mainly in the Gulf countries). The Rs 6,000 crore the state receives in remittances every year is about a fifth of its domestic product. These
remittances are three times more than what the state receives from the Center as budget support. Between 1980 and 1995, more than Rs 31,350 crore flowed into the state from the Gulf.16 This disproportionately large income is due to the fact that Kerala accounts for approximately 50 percent of Indian migration abroad even though it represents only 3.4 percent of the total population of the country. Since remittance income is counted as part of the state’s income but not its Gross State Domestic Product, Kerala may not be as poor a state as its GSDP figures suggest."