The NRI and India’s rural economy

The total amount of FDI investments in India is estimated for 2007 is $ 15 billion. And we tout that fiigure proudly – and our stock market fluctuates on any variance from that figure too. Guess what NRI”s will remitt to India in the same period ? A mind boggling $ 30 billion ! 60% of which goes into goes into Rural India. Most consisting of small amounts for the maintanence of families left behind, or small investments. If the world bank is correct, every dollar remitted contributes 3 dollars to the GDP growth – which means that NRI’s are contributing to growth of almost a $ 60 billon to India’s rural economy.
(25 million people of Indian origin live outside India. On the other hand 45 million people of Chinese origin live outside China – but they remitt just $ 25 billion into China.) ……..


… and yet our farmers are committing suicide, not only in Andhra but also in Maharashtra. We hear that Rural India is being left behind as GDP surges in Urban areas. I don’t know the answer and hope that some of our community can enlighten me.
I know that a large number of India’s problems arise from completely inefficient and corrupt distribution systems. We grow enough food for example, but a large part lies rotting in warehouses, dotted all over. Or being eaten by rats.
shekhar

22 Responses to “The NRI and India’s rural economy”

  1. Aditarya says:

    Situation of the farmers was never good in india. The NRIs ofcos play a very vital role in rural development but y it is not entirely visible is bcos they remit money mainly in specific parts of india. thats y gujrat / kerela rural india is much better than rest of rural india. But a study of which parts the money is exactly remitted to can be very interesting. Or maybe the remitted money is so small for each transaction that it is consumed and not invested or maybe invested in cities. I m sure some data must be available…

  2. Himanshu says:

    Dear Shekhar,
    The NRIs are definitely doing wonders for India and in most cases they love and care for India far more than the people who live inside do. I have been lucky to see it from both sides and I truly see how much the NRIs in the US and UK love India and want to help. Plus, they have the resources to do it.
    I believe the problem lies in the fact that maybe $30 billion is not enough and we need more given the size of our country (I am no expert at this). We also need a better distribution system for the million of tonnes of food lying in our warehouses that can feed so many people (this thing just hasn’t become a priority at the national level – I just don’t know why?). I think we need more banks which can give loans to farmers at lower interest rates and better support prices. As I had mentioned earlier the farmers also need to take responsibility and train themselves to do other things – even coming to the city and driving an auto or rickshaw or selling tea is better than dying of hunger. Also, they need to have smaller families so that they are not constantly hand to mouth and under pressure to feed so many. I think the changes have to come from the top in this case as it is not an isolated issue. The media needs to take center stage and make this a big issue – if it got the same coverage as the racism row in Australia, something would definitely happen.
    Best Regards,
    Himanshu

  3. Himanshu says:

    MAGIC OF INDIAN CINEMA
    Dear Shekhar,
    Today, I woke up feeling a little empty and just felt something was missing. Have been watching lots of slightly frivolous and sort of hollow films(except Taare Zameen pe) the last few months (I just go to the PVR in Hyd each Sat and see 3 films from 2pm to 11pm) and wanted to experience something truly full of “weight” today. I decided that I should go buy some great film, something truly magical. So I went to the DVD store and after going through 200 DVDs picked up the DVD of Bazaar (and it also related to Hyderabad) and spent the evening watching it.
    Many thoughts came to my mind while having this divine, magical and thoroughly fulfilling experience of the best of Indian cinema. The acting of Naseeruddin Shah, Supriya Pathak, Farooque Shaikh and Smita Patil is so flawless (the best you can find anywhere on the planet), it doesn’t even seem like acting, the songs so melodious and timeless you can’t stop hearing them – they kind of haunt you forever (like “Karoge yaad to har baat yaad aayegi…” – such a masterwork). There are some scenes where Naseer is just looking directly into the camera, almost expressionless, yet I can probably write a paragraph on what he is emoting. Few films can successfully transport you into a totally different world and even fewer can make you feel for the characters so much that you almost want to go there and help, and keep caring for them long after the film is over – this is one of those great ones. I feel you are so lucky Shekhar that you were in the middle of things (parallely making Masoom) when such great films were being made in Bombay.
    I wonder where these great masters of cinema have gone today, and do we have any young actors who can match the acting standards set by the greats mentioned above? While we are making some good films, why do you think Shekhar we are not making or able to make timeless classics today?
    Best Regards,
    Himanshu

  4. Sree says:

    Shekhar, nice blog as usual…but just a small correction though, it is 25 million people of Indian origin live outside India. In your article it is mentioned as 25 billion …please correct it.
    thanks,
    Regards,
    Sree

  5. Sree says:

    Dear Shekhar,
    Can’t agree with you more on the fact that Rural India is being neglected. However, it is the time that Enterprises look into Rural markets and develop the infrastructure accordingly. Indian rural market is pretty big. look what Telecom companies have done in Rural India, now almost every Indian can afford a Phone. This creates economies of scale and millions of Jobs.
    Here is my wish list for Rural India:
    1. Empower the rural youth by providing them skilled/unskilled jobs.
    2. strengthen the supply chain in agricutural sector, allow FDI in strengthening the infrastructure.(Kamalnath is pitching really hard).
    3. Government should take the complete control of rural education sector. It is high time we empower our rural youth and Provide them with better education.
    4. Encourage entrepreneurial skills and provide a broad spectrum of investment base. If need is the mother of invention, we have the need to improve the quality of life in Rural India. This how we can be good at innovation.
    Hope somebody is listening to me…If not, I’m gonna do it myself.

  6. Pallavi says:

    Hi,
    There’s a site that reports on a lot of issues of India.
    http://www.indiatogether.com/agriculture/suicides.htm
    The series by P. Sainath on the agriculture scene throws some very expansive light on all the issues.
    Seems like a bit of a policy, loan processes, land right, sometimes access problems.
    Reminds me a bit of what Amartya Sen says about famine, and also maybe understand what exactly the Bangladeshi banker who provides loans actually does!!
    It also reminds me of a movie in kannada, called Tabarana Kathe by Girish Kasaravalli.
    http://en.wikipedia.org/wiki/Tabarana_Kathe

  7. shekhar says:

    thanks sree, the correction has been made

  8. sunshine says:

    reassuring is’nt it ? but then thats the charm of INDIA ! go where you like but it travels with you in each beat of your heart !
    can you imagine the plight of a homesick indian (abroad)who wakes up to a light drizzle outside and the strains of old classic hindi songs playing in the background….? images of kids splashing in puddles, folks caught in an unexpected shower without the umbrella……laughing and enjoying in the rain…..hot cups of ‘adrakwali chai’ made specially for this weather…..?
    and then the REALITY of his antiseptic pristine surroundings and calls of ‘ghastly weather’ in that peculiar twang !!
    YOU probably experienced this too ? the natural thoughts that follow would be ” if only MY country had the same opportunities to offer….then why the hell would i have come here?!”

  9. Navin says:

    Rural Development is a must if India has to progress as a Nation. New Infrastructure projects should be spread across the length and breadth of the country to have a uniform growth everywhere and not just in the big cities. This would also prevent widespread migration to big cities like Mumbai, Delhi etc. which are already bursting at the seams.
    Cheers!
    Navin

  10. hp says:

    The primary thing to do in India is to spread awareness of the need for educated, sophisticated leaders and politicians..everything else depends on that. The current government which is filled with criminals and self-gratifying pseudo-liberals needs to be replaced in the next elections.
    The BJP has to come back to power to handle the progress of India, any which way you look at it, it is much less corrupt than the Congress.
    A strong liberal Hindutva spirit, inclusive of all religions, must dominate and unite India to take on corruption and establish a fluid infrastructure.
    The media needs to be kept in check since there are rumours that a lot of foreign money is being put into Indian media through vested foreign religions and communist philosophies. The growing amount of sexual and “modernized” content needs to be controlled and substance-abuse issues need to be tackled at this primary stage before it gets full blown as in other developed countries.
    And in summarized response to another blog here by Shekhar about the molestation of girls in Mumbai..more than any blame games attributed to traditional Indian culture, it is foremost to be blamed towards the direction that the Indian media including Bollywood has taken in the past few years..they are alienating the new generation from the grounded traditions of old in the guise of individual freedom which is nothing but inflation of ego putting individual before society. India is not ready to be as sexually explicit in media as the west, because it does not have the laws that persecute the violent outbursts of repression..in the west, these are controlled by laws, but the repression stays and morphsinto depression..so when output not equal to input, its trouble..so the input has to be balanced.
    Our very own goonda politicians such as Karunanidhi are dealing blows to the great heritage by supporting the Ram Sethu project under the leadership of an ex-Italian waitress.
    Influential people who align with such thoughts need to get more involved in getting the BJP back..material progress can quickly lead to self-destruction if the social conditioning is not balanced. Please take this seriously.

  11. Yuva says:

    To put the scale of the remittances in perspective, consider this: money received by India through this route is roughly the same as the country’s total estimated annual expenditure on defence, or about five times the estimated expenditure on education in 2007-08. Total income tax and wealth tax collections in the country are less than the remittances received. (/legal – outside hawala. wonder how much would be the total). World Bank study estimates that the number of Indian immigrants is about 10 million.
    % of this money going to rural indian is not high (as you mentions) and whatever it is- its not even. example- kerala and gujarat is two states which high get major share.. and in bihar & east its almost nil.
    may be that explains uneven growth..

  12. kishore says:

    NRIs pumping money into India is a good thing for India, there is no question about it, and the economic progress clearly reflects that.
    But as far as rural areas are concerned, I am beginning to wonder if they are not hurting India. NRIs are bidding for and buying farmlands and housing real estate for inflated prices and either squatting on that or just flipping the real estate, treating it like a stock market. This does not do any good to India and to the farmers – they cannot possibly compete with NRI dollars in procuring land. This leads to the artifical inflation of real estate market, as well as the fact that NRIs are NRIs – non-resident, so they don’t develop the infrastructure much. Real estate should belong to the country & its residents as much as possible, so they can develop infrastructure and take it forward. I’m not saying this should be draconian, but there should be some amount of thinking in this area from politicians.

  13. you are looking at the total figure-of the NRI’s i mean. that doesnt give the whole picture. the states with developed rural areas have more NRI’s than the say, BIMARU ststes. kerala, for eg, survives on NRI funds. being unfriendly to induustrial growth, it doesnt generate income. agricultural production is also zero-yet it is the most ‘developed ‘ state in terms od health, education and the negligible % of BPL group.thanks to NRI’s pumpimg funds into the state.
    guess widespread literacy as also te manageable size of the state also have something to do with the better condition of rural kerala. in fact, ‘rural’ kerala is nothing like the rural regios in other states. rural kerala is highly urbanised-no area is too remote to have medical facilities, educational institution, cyber cafes and departmental stores.guess goa too is similar.

  14. Its not just NRI money India gets. What about Missionary money that runs into several million dollars every year. Simply where all this money going???
    Shekharji, people like you who have advantage of voicing where it can be heard clearly, must take initiatives to question these people. The other adventures of common man has totally been hushed.
    It is painful to know that only if the money hidden in nooks and corners of India can really be accounted, we would definitely be richer than most other countries today. Just 10 top ministers’ swindles are good enough to run 2 villages for a year.

  15. opinionated says:

    How about an honest discussion about why so many indians seek fortune outside indian and never return to help their own country. It’s really disgusting to see the pig at the trough Mittal living in London. Just one example. Think of the number of Indian doctors around the world while the health care situation in India is deplorable. Truly a tragedy that these carpetbaggers perpetrate.

  16. DEAR, SHEKHER JI… I AM A MEDIA STUDENT WORKING ON RURAL DEVELOPMENT ISSUES. I WANT TO COLLECT THE INFORMATION ABOUT THE RURAL INDIA IN INDIA CINEMA.I NEED YOUR FAVOUR FOR THE SAME.
    HOPING FOR A POSETIVE RESPONSE AND YOUR SUPPORT AS WELL.
    I LL WAIT FOR YOUR REPLY….
    WITH REGARDS
    UMASHANKAR MISHRA
    NEW DELHI
    9968425219

  17. Nandan says:

    Any organistaion intending to work in these remote areas often has to build the basic infrastructure too (which ideally is the role of governments) – health education work opportunities good housing –
    regards
    nandan

  18. Monika Wadhan says:

    Dear shekhar sir,
    its good to see that NRIs are doing well in other countries. They love & care for India so far more than the people who are living inside the country.
    But you are looking only at the whole figure. but it is not helping to develop India’s rural areas. The roads are not Quite good their & so much unemployment is also their as we know. we have the examples of rural areas of U.P. & Bihar.
    & Plz tell what kind of step People should take (Individually) to improve Infrastructure.
    Thankyou

  19. kavitha says:

    Which economy is in best condition in the world?
    A) American
    B) Asian
    C) European
    D) Africaan
    E) Middle east
    To vote for this question please click the link given below
    http://www.opinionpoll.in/AF102

  20. VMG says:

    I THINK THAT BEING AN NRI IS JUST BEING A COWARD WHO ALWAYS RUNS FROM THE SITUATION.I AGREE THAT THERE ARE PROBLEMS IN INDIA.ONLY FOR MONEY PEOPLE RUN TO WEST.I ALSO AGREE THAT NRIs INCREASE THE RESPECT FOR INDIA .BUT ARE THE PROBLEMS IN INDIA DECREASING?PEOPLE SAY THAT PEOPLE ARE DYING in INDIA BECAUSE OF POVERTY AND EPIDEMICS .HAVE THEY
    THOUGHT WHY?UNLESS SOMEONE HIGHLY QUALIFIED WILL STAY HERE NOTHING CAN HAPPEN?BUT ALL RUSH TO WEST.

  21. RMC says:

    COMMON GIVE ME THE CHANCE

  22. ishani says:

    hey shekhar,i m a student of agriculture,3rd year.i m nt an expert of the datas relevant to u’r topic of concern but what i think is that the government should play a role of providing good extension service to the rural lot.this would help them to gather knowledge about various enterprises just by sitting around in their own villageas the indian crowd is quite lazy.and also as mentioned by another person that rural people should try having nuclear families which is very much correct,government should impose rules of having small families as is the case in china…we being agriculturist try our level best to convince the farmers but they are very much reluctant to use and incorporate modern technology on their farms…they just can’t think of the future in a more friutful way…we just keep trying.lets see how best we suceed.
    with regards
    ishani

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