Interesting Article from buisiness line

THE media were full of statements and speeches from the "visiting NRIs and Government dignitaries". The leaders and representatives of non-resident Indians and persons of Indian origin have come and gone. The world at large is, however, not much wiser.
Incidentally, some visiting NRIs lectured India and its Government. A few among them thanked the Government for the much-awaited dual citizenship, which may be a doubtful blessing.
Many among the NRIs asked the Government to assure better governance, a request, shared by the resident Indians.
The non-resident Indian has played an important role in India's political and economic history. Mahatma Gandhi was himself a famous non-resident Indian, who came back and stayed to fight for India's freedom. A phase of non-residence does sharpen one's awareness of the political and economic realities back home. Other countries have similar heroes. Ho Chi Minh himself learnt his ropes in Paris as a non-resident Vietnamese. The non-resident acquires a new vision of what can be done and dismisses bottlenecks and blocks to progress. He is willing to dream and ask "why not?"
Notwithstanding all the troubles and the grievances of NRIs, the recent jamboree of non-resident Indians should have, at least, taught a lesson or two to the presiding deities at New Delhi. We need a conscious and focussed policy of dialogue with NRI interests — one that encourages constructive cooperation.
In the 1980s and early 1990s, the India Investment Centre played an important role in attracting and facilitating NRI investments as well as other foreign investments in India. Established by the legendary innovator T. T. Krishnamachari, the India Investment Centre offices in Delhi and abroad became beehives of activity. Its initial tutelage under R. S. Bhatt gave it a special flavour.
Not much is now heard of whether the India Investment Centre continues to play a role. Indeed, the institution seems to have faded away completely following the liberalisation of the 1990s.
The IIC Offices at New York, Tokyo, Frankfurt and London, besides the one at Singapore, had at one time a very important role to play to be re-energised.
What is important is to find out the secrets of what made NRIs successful in their adopted countries. Very often, we hear a successful NRI say "Conditions are different over there" referring to his adopted home. He feels that the atmosphere of freedom and transparent governance — as also access to credit — in the new destination were responsible for his success.
We hear stories of rags-to-riches retailers who have made millions, pickle-sellers who have accumulated honours and palaces, and above all, the whiz-kids who have risen high in far-off Britain and the US. Success stories also abound of NRIs who have made it big in the Silicon Valley.
All these stories should make us ponder. We need to find out exactly what were the conditions that made the expatriates flourish and succeed. Maybe, we can learn a lesson or two as to where we went wrong.
"Remove the licence and permit raj, make credit more freely available, make governments more investor-friendly, get the tax regime to encourage investment" — these are some of the elementary messages which one gets from every NRI conference. Many an NRI can cite a specific experience or two of insults borne patiently, hurdles thrown in his path and brakes pressed on him.
It was quite an experience in the late 1980s when we used to hold NRI conferences in New York and London.
I was present at a few of these when Mr V. P. Singh and Mr N. D. Tiwari were Finance Ministers. Mr V. P. Singh was quite concerned and asked for quick responses to their grievances.
But, given then prevalent licence raj, the environment did not permit of much response, as he would have wished. He, however, realised that individual grievances of NRIs typified a systemic problem — that of slow or no-response by Indian officialdom.
I particularly recall a conference in early 1990s, which was addressed by Dr Manmohan Singh at Singapore. One of the purposes was to canvas the idea of the NRI bonds. It was at that conference that Dr Manmohan Singh took the opportunity to announce the scheme for automatic clearance of FDI proposals by RBI — which also gave a boost to NRI direct investment into India.
Dr Manmohan Singh was also involved in a tête-à-tête with NRIs in Bangkok, where he had gone to participate in the annual IBRD/IMF meeting. The NRIs did represent to him many grievances.
But what struck me most was the patient manner in which he took in their suggestions, especially in regard to convertibility. Although Thailand paid a price for going to an extreme with capital convertibility, it was clear that some of the comments of the NRIs registered on Dr Manmohan Singh's fertile mind.
We saw the results later, when he announced his decision on movement towards convertibility. It is essential that we revive the practice of searching out and addressing grievances of NRIs because on that depends the success of our effort to attract NRIs to invest in India. The recent conference in New Delhi was a useful start in the process of rediscovery of our weaknesses and strengths.
There was a Committee on venture capital under the Chairmanship of Mr K. B. Chandrasekhar.
It is not known what precise steps have been taken to activate venture capital in India. Tax law and regulatory restrictions are still impeding the growth of venture capital.
In this context, the Vijay Kelkar proposals for taxing global incomes of residents but not ordinarily residents — a category which could include many non-residents — may also have serious implications. How the NRIs will react to this proposal is not clear. Obviously, it will drive many NRI remittances into the havala market, from which they had emerged in the last few years.
The convening of the Global Investors' Meet in Kerala is another instance of a focussed approach to the NRI phenomenon. Kerala, in particular, needs to do that.
The remittances of NRIs belonging to Kerala are significant. Kerala needs to create a more conducive environment for intending returnees to invest. But the systemic problems in Kerala's political and social context are too deeply entrenched. To what extent the dedicated efforts of the Chief Minister, Mr A.K. Antony will succeed remains to be seen.
At a minimum, our leadership should study the NRI grievances constructively. The success stories of NRIs abroad deserve to be widely studied. The reasons why they succeeded have to be understood. The bureaucracy and political leadership have to learn a lesson from the conditions that led to their success.
To replicate their success in India, we need to recreate similar environment, to the extent possible, given our backwardness.
A roadmap for such a transformation is what one expects from the global investors' meets and the Pravasi Divas. Will we have to wait for another generation of economic reformers or will we get a quick and sure stream of changes?
The promise of dual citizenship alone will not help so long as the regime of rules and regulations remains unchanged. It is this transformation of the whole system that NRI conferences should trigger.
A successful effort of reform should get under way where it counts — in the corridors of power in Delhi, Kolkata and Thiruvananthapuram.
It must be clear that NRIs are no longer "not required in India", but "newly returned to India". Let the NRI conferences start a new reform movement where it matters — in governance and in the social and economic system.
We need to start a new movement to address the concerns of NRIs, even if they may sound too radical and too demanding. They should not be treated as highfalutin and too high-pitched a set of requests. They are bringing to bear a new attitude born out of their rich experience in different countries. It is only appropriate that India gives these suggestions the respect they richly deserve.
The periodic conferences of NRIs will be well worth the while if only the Governments takes the trouble to act on their recommendations and report back at future meetings. NRI conferences should not be treated as routine grievance sessions, but as potentially rich catchment areas for ideas and suggestions — besides the moolah the NRIs undoubtedly bring into India.
Dual citizenship will truly have meaning if the NRIs are heard and their advice taken. One hopes that the latest conference does not end up by being just a formality but represents a new beginning in the tempestuous relationship with our extended and affluent diaspora.