Is Modi watching? Kerala’s Rs 1.1 lakh crore idle NRI deposits could propel his ‘Make in India’ plan

Internal turmoils in Libya and Iraq and the new stringent labour law in Saudi Arabia have triggered an exodus of Indians from those countries in recent times. But this has not cast a spell on the flow of NRI remittances to Kerala, which accounts for one-sixth of all the money deposited in NRI accounts.

According to official data, NRI deposits in Kerala have now crossed the magic figure of Rs 1 lakh crore, soaring by more than 17% from Rs 93,884 crore to Rs 1.1 lakh crore at the end of 2014-15.

Remittances from NRIs form the backbone of the Kerala economy. Commercial banks in Kerala thrive on NRI deposits which stand at Rs 64,700 crore in PSU banks and Rs 44,900 crore in private banks. A Kerala government survey shows that remittances sent by the diaspora support at least 50 lakh people, that is about one-sixth of the 3.15 crore population of the state.

Of the 16.3 lakh non-resident Keralites, 88% live in West Asia. The maximum number of Keralites, around 5.73 lakh, reside in the UAE and around 4.50 lakh in Saudi Arabia. The number of Keralites migrating to the US and Europe too has risen in the last decade thanks to the boom in infotech and healthcare sectors.

According to Government data, there are over 78,000 Keralites in the US, nearly 53,000 in Europe and about 10,000 in Canada. Migration to Africa too has gone up in recent years with an estimated 7,000 Keralites residing in different parts of the continent.

It is a pity that the State Government has done pretty little to channelise NRI remittances to productive purposes like development of infrastructure. The lion’s share of remittances go for conspicuous consumption like palatial houses, luxury cars, liquor, gold, expensive weddings etc.

Ironically, when the state is flush with NRI money, infrastructure projects in the state are in limbo due to lack of funds. The state’s agro-economy is sagging and the manufacturing sector is languishing for want of investment and political commitment.

NRI investors are impressed by the track record of Cochin International Airport Ltd (CIAL), the country’s first greenfield airport under the PPP (public private participation) mode. CIAL investors have recovered as much as 130% of their money after the airport became functional. They are all too willing to invest in infrastructure and industrial ventures in the State provided the Government guarantees the safety of their investment and reasonable returns.

A recent meeting of the non-resident Keralites at Kochi wanted the Government to float NRI bonds with attractive interest rates so that their hard-earned money does not flow into the hands of private financial groups, which are out to make huge profits.

Their other demands included creation of an expat investment facilitating outfit and concessions like land ceiling exemptions for the investors.

Is Narendra Modi watching? The Rs1.1 lakh crore idle NRI deposits with Kerala could be a bonanza for his Make in India initiative.

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