NRIs appeal to Modi

K V Shamsudheen, Chairman of the Dubai-based Pravasi Bandhu Welfare Trust writes a letter to newly elected Prime Minister Shri Narendra Modi explaining the problems of Indian expats face during their struggle to live in a foreign country


Modi attending the Pravasi Bharatiya Divas Sammelan in New Delhi when he was chief minister of Gujarat
Modi attending the Pravasi Bharatiya Divas Sammelan in New Delhi when he was chief minister of Gujarat

Dear Prime Minister,

On behalf of  non resident Indians (NRIs)I congratulate you for winning the Indian Lok Sabha election with highest number of seats for Bharathiya Janatha Party in the parliament,  I congratulate you and giving you full credit for this success.

Pravasi Bandhu Welfare Trust (PBWT)  had established in 2001 for the welfare of the NRIs. On behalf of PBWT I have been conducting financial awareness programs, to educate lower and middle income segment of NRIs on financial discipline and financial planning and to cultivate  saving and productive  investment habits. The objective of the programs is, to have enough financial resources, to look after their family when they return back to India. With this objective,  I conducted more than 300 financial awareness classes, more than 600 weekly live interactive radio programs and more than 300 live interactive TV programs. Georgetown University had made a study on the effectiveness of this programs and they find it is most effective financial awareness tool.

We NRIs are sending you a representation to received on the day one you are in prime minister’s office for your consideration and implementation. All these issues we had referred here are submitted by us to UPA government many times, unfortunately we could not get any result from them. In the last Pravasi Bharathiya Divas, you had promised that when you will be in the power you will address all our issues, so we have a great hope on you. NRIs from all over the world are eagerly waiting your reply for this representation.

The Indian Diaspora, forms an important constituency, of India’s economic growth and development.  Estimated at over 30 million, the Diaspora community, is today the diverse, heterogeneous and eclectic faction, representing different regions, languages, cultures and faiths.

Its contribution, to the Indian economy and society is a matter of great pride, and achievement for Indians world over. Non-resident Indian and People of Indian Origin (PIO),  have emerged, as the largest  pool of knowledge, skill, resources and enterprise, acting as India’s, brand ambassadors globally.

India is the, second largest exporter, of human capital in the world. India is the largest receiver of Diaspora remittance in the world with US$75 billion.

1.Indian Diaspora always in forefront to support  the country:

When, the country had been passing through, deep economic catastrophe, Indian Diaspora  came forward all heartedly, to support our nation, by investing in India Development Bond, India Millennium Deposit and Resurgent Indian Bond and many projects like Konkan Railway, Narmada Nigam, etc.

Foreign Direct Investment(FDI), Foreign Institutional Investors (FIIs)s and Exporters, are getting various concession and red carpet welcome for bringing foreign currency to India.

NRI remittance is equal to 2.5 times of FDI

  • NRI remittance is equal  to 25% of our export
  • NRI remittance to the country is 6% of our GDP

NRIs are getting only one concession, that exemption of tax on interest from NRE and FCNR deposits.  We request to offer more concessions to NRIs  for bringing foreign currency to the country.

2.How to Utilise NRI resources for National Development:

The non-resident Chinese had played, an important role, to achieve the present economic supremacy of China. China utilized, the economic resources, knowledge, expertise, experience and business contact of them  for the national development. Whereas India never made any such attempt to effectively utilize the resources, of Diaspora for the national development.

We request the new  government to utilise, the economic and intellectual resources and business contacts of Indian Diaspora, for the development of the country.

Person like Dr Anji Reddy, who set up Dr Reddy’s Laboratories in 1986, was an NRI. Today Dr Reddy’s Lab is  an  Indian multinational pharmaceutical company.

If government of India, give some special concessions, one window clearance facility and red carpet welcome for  Non Resident entrepreneurs, there are thousands of very successful entrepreneurs all over the world ready to come to India  and set up business in their mother land.

3. NRI Joint Ventures with Indian Entrepreneurs:

We have many successful entrepreneurs in the country, we request  the new government to encourage them to join hands with NRI, for expansion and diversification of their existing ventures. It will help to channelize NRI financial resources for the development of industries in the country and to get knowledge to NRIs on Indian system.  This joint ventures will be create new synergy in Indian industry.

4. Preferential allotment of shares in Initial Public Issues:

NRIs were getting 40% reservation in the initial public issues (IPO) earlier. Recently that had been withdrawn by UPA government so when NRIs participate in the IPOs the chances of  getting allotment very low.

We request  to reinstate the 40% reservation in the public issues and give an opportunity to participate in the future IPOs with expectation of fare allotment.

5. Exempt short term capital gain tax on capital market investment of NRIs and Qualified Foreign Individuals (QFI)

When FII investors invest in Indian capital market they technically are not paying short term capital gain tax. Whereas NRIs and QFIs who invest in India by foreign currency in Indian capital market have to pay short term capital gain tax. There is no justification in imposing tax on Indian and give concession to foreigners.

We request the new government to exempt short term capital gain tax for investment in capital market by NRI sand QFIs.

6. Permit NRIs to invest in Public Provident Fund:

Presently NRIs are not permitted to invest in Public Provident Fund, we request the new government to permit NRIs to invest in Public Provident Fund. If Public Provident Fund  investment has been allowed to NRI it will encourage to flow huge foreign currency to India.

7. Mahatma Gandhi Pravasi Suraksha Yojana

Government had introduced, a scheme called Mahatma Gandhi Pravasi Suraksha Yojana, an investment and insurance scheme for NRIs, which is available only workers who has Emigration Clearance Required(ECR) seal in the passport. I had noticed that there are many ECR category who draw high salary but many who has no such seal are drawing very low salary.

We request to the new government to extend this scheme to all NRIs whose monthly salary is less than US$ 300.

Even though the scheme had started two years back, so far only 800 NRIs had joined. There is lack of interest in the ministry of Overseas Indian Affairs to propagate this scheme so obvious reasons.

We further request to the new government  to entrust all banks to propagate this scheme to NRIs and to  take special interest, to reach this scheme, to the deserving lower income NRIs.

8.Reduce tax on NRO account par with resident accounts:

Once withdraw money from NRE bank account,  NRIs  can’t re-deposit that money  in NRE account, so they open NRO bank account, and park the money in that account.  For resident Indians tax deducted at source from interest is 10%. Whereas tax deducted at source for interest from NRO account is 30%.  Instead of encouraging NRIs to keep money in non-repatriable account in India , the present system is penalizing by imposing triple the tax to NRIs than resident Indians.  We request to the new government to charge 10% tax, for NRO account par with resident Indians.

9.Set up Pravasi Housing Complexes:

One segment of NRIs are lavishly spending for housing at the same time another segment is struggling to have house in many Indian states because of high price of land. If state housing boards build Pravasi Housing Complexes with reasonable price in all districts where NRI concentrations, it will be great relief for lower and middle income NRIs. We request to the new government to encourage state governments to take the initiative of NRI housing complexes.

10. Permit NRIs to invest in Agricultural Properties:

As per the prevailing law, NRIs are not permitted to invest in agriculture properties. In states like Kerala, Tamilnadu, etc. illegal  investment in agriculture properties by NRIs is very common because no other investment opportunities available. We request to the new government to permit NRIs  to invest in agriculture properties with a condition to utilize such properties only for agriculture activities.

11. Participation in infrastructure developments:

India want huge sum, for proposed massive infrastructure developments. If Government of India issue, long term tax fee infrastructure  bonds, for the infrastructure developments, NRIs will participate and support whole heartedly.  We expect, the new government will introduce, infrastructure tax free bonds for NRIs.

12. Baggage Rule:

We had a baggage  rule passed in 1967. At that time, one male passenger can carry Rs 10,000 of worth of gold jewelry, and female passenger can carry Rs 20,000  worth of jewelry.

In 1967  the international price of Gold for troy Oz was US$ 34.00 and  gold price in India was Rs.7.65  per gram. So in 1967 one male passenger can carry 1300 grams of gold jewelry with Rs 10,000 and female passenger can carry 2600 gram of gold jewelry with Rs 20,000  from abroad.

As a result of  continues demand NRIs,  government of India  had increased, duty free allowance of gold jewelry  to Rs 50,000, for  a male passenger and Rs 100,000, for  a female passenger.

With the current price of gold, a male passenger can carry only 16 grams of gold jewelry and female passenger can carry 32 grams  of gold jewelry with this allowance.  The weight of  mangalya sutra will be much more than permitted value, so that this allowance is inadequate for a NRI.

In the present baggage rule all the items one can bring from abroad had mentioned by quantity, but gold by value.  So, we request to the new government to increase the duty free allowance of gold jewelry by value like other things, and permit to bring  gold jewelry for 50 grams for male passengers and 100 grams for female passengers which very low quantity if we consider 1967 level.

Similarly a NRI passenger  can carry, worth of goods Rs 35,000 as per the law. Because of the inflation, in more than half a century, this amount is inadequate, it has to be increased to at least Rs 200,000.  If the new government will consider this proposal government need not spent much for gold import.

13. Slash import duty of Gold:

Our second largest import is gold. India has been spending huge sum for gold import for domestic use, if the import duty on gold is relaxed the illegal entry of gold will stop and NRI can bring more gold by paying foreign currency.

14. Encourage to sell Indian products to NRIs for foreign currency:

Indian companies are manufacturing very good quality of electronic items, home appliances and white goods. If the government introduces a scheme “pay tax free value in foreign currency and get it in export price” for NRIs  it will stop the inflow of foreign products to India.

If Indian products are displayed in Duty free shops in the arrival launch of international airports, NRIs can choose the Indian  product from there and pay the  tax free value of the selected items in foreign currency. Those products  can be delivered by the companies in their homes.  It will increase the foreign currency in flow to the country considerably and the consumption of Indian products will increase.

15. Preferential Allocation of seats for NRI and PIO students.

The All India Council for Technical Education (AICTE), New Delhi, through a circular dated February 16, 2004, directed all state governments and universities to reserve 15 per cent of their seats in professional institutions for children of Non-Resident Indians and Persons of Indian Origin.

The circular said five per cent of the reserved seats in all AICTE approved institutions must be made available exclusively to children of workers in the Gulf countries. The circular was categorically said that NRI students were not to be subjected to special fees and that children of Indian workers in the Gulf countries were to be treated at par with resident citizens.

Unfortunately the instruction had not been implemented by our professional institutions. On the contrary the colleges are levying exorbitant fees from NRI and PIO children.

The last edition of the Plus-2 examinations witnessed more 3,000 such candidates with 75 per cent of them finally opting for professional courses under AICTE. I appeal to your government to insist to all professional colleges to  implement this proposal for the benefit of NRI and PIO students.

16. Solve Air Travel Problems:

Air travel, is burning issue of non resident Indians. Our national carrier will increase the fare exorbitantly, during the peak seasons, like school holidays and festival seasons in India. When our national carrier fix the fare, all  other airlines follow the suite,  all of them collectively loot the NRIs charging hefty fare. This very high price disparity, is visible  only in India – GCC sector.

Because of the very high travel cost,  major portion of the earning of Indian expatriates eat away by air fare.  NRIs from Gulf region have been demanding to end this exploitation  since decades.

If the new government will do something constructive to stop this exploitation, NRIs will not forget your government.

17. Voting Right for NRIs:

Non Residents Indians, from all over the world had been demanding, since many decades for voting right. At last UPA  government made necessary amendments in the law and permitted NRIs to cast vote by physically presenting.

According to resent report, the total number of NRI voters had been registered, in voters list all over India  is mere 11,844. Out of that, Kerala has 11,488, Punjab: 138, Tamil Nadu: 112,  Pondicherry : 56,  Goa: 27, New Delhi: 13, Maharashtra: 13 and the rest of the states no NRIs voters in the list.

Very soon we will get the correct figure of how many NRI had franchised their votes from 11,844 names in voters list.  Under the present system those who were on vacation, if their names are in voters list only could cast vote.  NRIs going exclusively for cast their vote will be bare minimum.

To get real participation of NRIs in Indian election system,  the online voting, with biometric identification is the solution. If the new government take up necessary steps on that direction,  in the next assembly election NRIs could cast their vote on line.

18. Status of Indians working in GCC region:

Nearly six million Indian have been working and doing business in GCC countries.  Majority of them are blue collar contract workers, so they will definitely return back to India after completion of the contract.

More than 60% of them are skilled, semiskilled and unskilled workers, from all over India.  The rest of them are white collar workers professionals and businessmen.

The lower income segment workers are starting their career with debt living with debt and returning with debt from abroad. All their earnings are spent by their families without any saving.

In the remittance front, the contribution of NRIs from GCC region, is very significant. Most of them are sending, almost all their earnings, to India to look after their families. A good number of the lower and middle income workers, are in debt. They are sacrificing, even the necessities, to give a good life to their families, back home.  Suicide among this segment is very common. In the remittance from GCC countries 65% is from blue collar workers from GCC

When we conduct a survey among Indian Expatriates in GCC countries and we find the following shocking  result:

  • Only 5% had enough financial resources, to look after their family, when they return back to India.
  • Only 2% of their families, are saving from the remittance.
  • 8% of death of Indians expatriates, are by suicide, in GCC countries. The main reason for suicide, is financial problems.


Many of the blue collar workers are returning, without a penny, in unhealthy condition. In such situation, these people deserve, some government assistance.  In India we have, many social welfare pension schemes. We request to the new government to  introduce, similar pension scheme, for unhealthy and financially weak Indians returning from abroad.

19. Untapped NRI resources in states:

As an example we can tell you the condition of Kerala. Kerala which has 3% of the India’s population,  this tiny state of Kerala had approximately  10%  of the Indian Diaspora. People living outside the country from Kerala, contributes over 40% of the GDP of the state, they  remitted more than Rs 90,000 crore, last financial  year.

The Diaspora from Kerala contribute almost 19% of the remittance to the country.  It shows Keralites spread all over the world had a very important role in India’s economy.

Similarly Punjab, Gujarat, Tamil Nadu, Karnataka, Andhra Predesh, etc. also getting huge some as NRI remittance.  But no state is properly utilizing this resources for the benefit of the states. Only  exceptional sate is  Gujarat, where you were utilizing a good  portion for the NRI remittance for benefit of the state.

According to RBI data 61% of remittance has been used for family maintenance. Very few percentage is going to reproductive investment segment from the remittance.

It is very unfortunate, the state governments never thought,  to introduce some scheme, to utilize at least 10% the remittance, for the infrastructure and other development of the state.

Indians outside India are specialized in sectors like educational, medical care, retail, hospitality, engineering industries,  etc. state governments never take up any initiative, to bring their knowledge, expertise and resources for the  development of the states.

At the same time, if any NRIs come their won with some venture, we had witnessed many organized agitation from all corners against such move. In spite of these odds, many star hotels, super specialty hospitals, many professional colleges, very good schools, shopping malls, etc. are established by NRIs without state government support.

We request the new government to instruct state governments to check out some schemes to utilize at least 10% of the remittance for the developments state.

20: Pay compensation to Mangalore Air Crash victim’s families:

The Mangalore air crash happened exactly five years back.  Air India had been trying to pay the compensation the lower level not on international norms.  Many victims families have not received the compensation. We request your government to intervene in this issue and pay to the victims’  families as per international norms at the earliest.

21. Opportunities are waiting for Indians all over:

The growing importance of international migration, will be driven by structural factors, both demographic and technological, in both developing and developed countries. Present demographic tendencies, will produce a major shift, in the size and structure of populations, in the European Union, US and Japan over the next 50 years. The population of current EU member states, Japan, etc. is expected to decline by about 12%  and become old by 2050.  It will give lot of job opportunities for Indians.

After the Arab spring, the rulers of Middle East and North Africa  region keep on talking on nationalization, more job opportunities for son of soil,  to make their   citizens happy. In spite all these efforts for the completion of many mega projects in these countries need large number of skilled and semi skilled foreign work force in the coming decades.

The new government must stop sending abroad unskilled and domestic workers. India no more be a exporter of unskilled and domestic workers.  The world is expecting highly qualified  professionals and skilled work force from India.

The new government should take up, skill development programs, with the collaboration of International skill development institutes, in all over India as a major initiative. It will help to get more quality job opportunities for Indians all over the world which will  increase the inflow of remittance by many folds.

Many decades, NRI had a feeling that we NRIs are Not Required Indians. When Shri Atal Bihari Vajpai was the prime minister he had acknowledged the importance of the role of non-resident Indians’ in the national development and increase of our foreign currency reserve. Today we have a strong feeling that the new government will change the neglecting attitude of UPA government and make NRIs as most required segments for the national development.

We offer you all support to all steps for a better India. Thousands of NRIs are waiting for your favorable reply.

Thanking you

For Pravasi Bandhu Welfare Trust