MOHAN GURUSWAMY | 25 MARCH, 2017
NRI: Know Alls, Do Littles
NEW DELHI: I recently received an email whose operating part was: “I would like to sum up our performance in the 20th century in one sentence. Indians have succeeded in countries ruled by whites, but failed in their own. They are flourishing in the USA and Britain. But those that stay in India are pulled down by an outrageous system that fails to reward merit or talent, fails to allow people and businesses to grow, and keeps real power with netas, politicians, and assorted manipulators. Once Indians go to white-ruled countries, they soar and conquer summits once occupied only by whites.”
There is an essential truth in this. The relative success of Indians in the USA has more to do with the quality of the American system, which affords the opportunities to all to pursue their dreams and professional quests.
Typically such self laudatory messages which list the Indians who have scaled high heights in the USA, people like Indira Nooyi, Sunder Pichai, Satya Nadella, Lakshmi Mittal and other such who are lauded and honored ever so often during their fleeting visits to India, do not mention Drs. S. Chandrashekar, V Ramakrishnan, Hargobind Khurana and Amartya Sen, all Nobel Laureates who brought India much honor.
Other nationalities too do well in America. George Soros is Hungarian. People of Chinese origin have won the Nobel eight times. US scientists of Japanese origin have won as many as five science Nobel Prizes. Even Pakistan has a couple of Nobel’s. So it’s not just Indians who are a special people. What are special are the societies and systems that allow talent and genius to flourish.
This success of some Indians in foreign countries has given rise to a certain NRI mentality which makes them believe they have answers to all our myriad problems with their complexities just because they have done “well” overseas. They forget they are not as special as the societies that give them a better shake in life.
They think they are successful, because they have realized a western lifestyle and western income. Our political and bureaucratic leaders too seem to have been considerably impressed by these “achievements” and the annual fests hosted by the Government of India to laud our NRI’s is typical of this mentality.
We don’t seem to realize that NRI’s and PIO’s cannot do much and actually do very little to benefit India. They have few investments here in India and our investment in them by what we have provided them and what we have let them take with them is still far greater.
Most of the non-corporate FDI in India is by resident Indians who round trip their illegally ferreted out wealth from overseas havens. The biggest investment our better off NRI brethren make in India is by investing in high interest bearing NRI deposits in Indian banks. Most of them simply borrow from US banks at low rates and make a good pile each year on the interest differentials. The problem is such funds now constitute a huge Damocles sword that by being able to take flight fast is a constant threat to our house of cards – Aadhar, PAN, debit and PIO included.
Of the about $370 billion of foreign exchange reserves now, over $130 billion are reckoned to be the combined contribution from the Indian Diaspora through deposits. This known in banking circles as hot money due to the tendency to take flight without warning. These funds just sit in foreign funds earning little and costing us quite a bit. Why we persist with this confounds me? We even have a separate ministry to tend to our NRI brethren. It's all just a waste of money but governments are notorious for wasting money on the relatives.
Remittances are about &70 billion half and mostly from our less privileged NRI brethren who toil in the most adverse conditions in the middle east, Africa and other hard places to be able to support their families in India. The NRI’s who talk at our NRI fests and who we laud hardly remit any money back home. But they talk and talk telling us what to do.
Typical is a friend who holds a modest job in the USA and who visits me every now and then. But when he comes here he is full of suggestions, most of them ranging from stupid to asinine, on how to make this country great like America. He thinks he can comment because he thinks he has achieved something in life. (I drink Scotch everyday kind of standards).
This logic makes me retch. These fellows forget that India adds a dozen billion dollar companies each year and at last count we had over 250 of them. Indians head almost all of them. An Indian today has become the Chairman and major owner of the world's second biggest mobile telephony company here in India.
Indians can do well and do well in India. They send up rockets to the Moon and Mars, perform heart transplants, design satellites, splice genes, write code and so many of the things that are considered at the edge of the new frontiers of technology. And they can do this far more frugally than anyone else. The Mars orbiter cost us just Rs.450 crores or about $73million and ISRO succeeded in the very first attempt.
There is a lot that is wrong with India. We can and should be doing much better. Nevertheless India's per capita GDP has grown six times over in the past two decades. It has grown annually at about 7% since 2000. Its GDP in PPP terms is the third largest in the world now and many western financial institutions, like Citibank and Standard Chartered Bank forecast it to be the world's largest by 2050. That’s just 33 years from now.
Finally, I end on a personal note. Tom Mullen, the janitor of the building where I lived when at Harvard, came to work driving a car and had passion for expensive racing bicycles. He lent me one for a while and had me over to his place for Thanksgiving. My Indian friends used to rib me about my friendship with him. Tom still probably makes more money than me. Harvard now pays its unionized staff a minimum of $16 per hour. Tom was a great guy, but does his income make him a better man than me?