THE NR EYE: Focus on investment in social projects
Monday, January 7, 2008
Indian officials have made it plain that they?ve given up using the annual diaspora conclave as a platform to woo investments of overseas Indians.
“The investment or money has not been forthcoming. Therefore, we decided that we will not ask for any investment this year (at Pravasi Bharatiya Divas 2008) but seek partnership from NRIs for philanthropic projects,” Overseas Indian Affairs Minister Vayalar Ravi told the media recently.
In India, the contributions made by migrants are not readily apparent in economic terms. Overseas Chinese, for example, accounted for 80 per cent or more of the inward foreign direct investment into China in the 1980s and early 1990s, when that country opened up. By contrast, Non-resident Indians (NRIs) accounted for 10 per cent or less of inward FDI after India opened up. Most of the capital sent to India by NRIs has been personal transfers to family and friends, not FDI.
In the past, NRIs have been critical of the ?hard sell? on investment as they do not come to the Pravasi Bharatiya Divas as investors with millions of dollars but mostly as professionals to share their expertise and experience in India’s forward march.
“We have found that there has been too much noise about investment and very little actual investment,” says Ravi. According to him, only around five per cent of FDI in India is from NRIs. “Yet I have met many people, salaried people, not millionaires, who want to contribute to improving conditions in their home state,” Ravi has been quoted as saying.
It was apparently with this thought that the government proposes to announce the setting up of an India Development Fund (IDF) at the NRI conclave to be held in New Delhi on January 8 and 9. January 9 marks the day the father of the nation Mohandas Karamchand Gandhi returned to India from South Africa.
The India Development Fund will reportedly be a not-for-profit trust, which will provide a single window to direct philanthropy funds to the social sector. The sectors have been identified keeping in mind the objectives of the 11th Plan, and these are mostly in micro finance, women?s empowerment, health and education. According to the ministry, reputed NGOs will be engaged and international accounting standards applied to the funds to demonstrate proper utilisation to contributors.
Obviously, non-residents would be extremely wary of contributing to any outfit with government involvement. The Indian community abroad has been pretty much unanimous in expressing its disgust over corruption and mismanagement in government.
That is not to say they feel the same disgust for their country and its people. On the contrary, instances of philanthropy by non-residents have been rising at a fast pace.
The Global Organisation of People of Indian Origin (Gopio) has adopted 50 villages, while the American Association of Physicians of Indian Origin (Aapi) has plans for linkages with rural health centres in south India.
Gopio has already identified a host of areas where the diaspora may contribute. Broadly, the areas include Water and Sanitation, Education, Land and Housing, Energy, Air, Climate and Forest Preservation, Sustainable Employment Creation and Economic Infrastructure.
While the publicists of India Inc. might boast of phenomenal economic growth and the stock indices might be shooting skyward, certain harsh realities remain.
Of the population of over one billion, 65 percent live in rural areas and the rest in urban conglomerates, most in less than optimal living conditions. Limited access to potable drinking water, rudimentary sanitation, the outbreak of epidemics and the latent fear of natural disasters are a part of the larger picture of India.
Over 600m low-income people in India, constitute the base of its economic pyramid with an average income of less than $2/day. ?The Next 4 Billion? report by World Resources Institute (2007) says “By 2025 more than 3bn people could be living in water-stress countries, China and India will be entering the global water-stress league.”
As for education, the proportion of vocational education in India is a meager five per cent of its total employed workforce of 459.10m as against 95 percent of South Korea, 80 percent of Japan and 70 percent of Germany, which makes a strong case for substantial percentage budgetary allocations to make India a manufacturing hub, according to The Associated Chambers of Commerce and Industry of India (Assocham).
Similarly daunting tasks stare the planners in other critical areas such as education, health care, energy, women?s empowerment and sustainable employment.
Understandably, therefore, the focus of this year?s PBD has shifted to areas like knowledge economy, culture and women?s empowerment from investment and infrastructure although this topic also has a plenary session the first day.
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