NRIs cut up with mother India on interest cuts

 

Oct. 05, 2004
By Gurmukh Singh
Hindustan Times

When Jagdish Tytler, minister for oversees Indian affairs, ventures out of the country for his first rendezvous with the Indian diaspora this week, he faces tough questions on his government's recent decisions to withdraw concessions to NRIs.

Tytler and Dr LM Singhvi are attending the NRI Trade and Investment Conference being organsied by the Global Organization of People of Indian Origin (GOPIO) in Brussels which started on October 4.

Slated to be the largest gathering of high-profile NRIs outside of India to date, the conference aims to ``sell India to Europeans and highlight the direct and indirect contribution of the Indian diaspora'' to European nations.

Inder Singh, president of the Global Organisation of People of Indian Origin (GOPIO) which is the largest and oldest body of NRIs, said the Indian diaspora was very unhappy with the withdrawal of concessions -- such as no-tax policy for returning NRIs and higher interest rates on FCNR -- by the government of India and will ask Tytler to explain these policies. GOPIO has already sent memorandums to Prime Minister Manmohan Singh and finance minister P.C. Chidambaram on the issue.

``The NRI deposit scheme was very popular with the diaspora and NRIs pumped dollars into India as they got higher interest rates. It was tax-free and the money could be repatriated. But once the forex rose, the government of India withdrew higher interest rates for us."

``In his recent budget, finance minister PC Chidambaram even imposed tax on the interest we earned under this scheme. His predecessor, Yashwant Sinha, had withdrawn the no-tax policy under which returning NRIs enjoyed tax holiday for nine years. Sinha reduced that period to just two years. Not only this, a returning NRI is now made pay on his savings made abroad where these are already subjected to taxation. It means every returning NRI pays a double tax on his money.

``The whole attitude in India is to fleece the NRI. We at GOPIO had mooted the idea of PIO cards for oversees Indians. When the government implemented it, the card carried a steep fee of $1000 annually. Only when we told them that it is too high did they relent and peg it at Rs 15,000.

``Till the mid-1980s, there was little interaction between the NRIs and the government of India. The point I am making is that there is little appreciation of the NRI community in their motherland. The diaspora is making direct and indirect contribution to the development of India in so many ways. About 100,000 Indians holding US passports have gone back to their mother country to work in various specailised fields. When multinationals set up shop in India, they look to these gems of the diaspora to work for them,'' he says.

Giving the example of China, he says oversees Chinese contributed about half of the $48 billion foreign direct investment (FDI) that poured into that country last year. On the other hand, India attracted FDI of just $4 billion and the share of NRIs was just 9.15 per cent. Why?

``A vast majority of the 22-million Indian diaspora spread across 110 countries want to contribute to the development of their motherland, but red tape, inspector Raj and bureaucratic hurdles are acting as big deterrents,'' says the GOPIO president who has been described as ``one of the 15 foremost south Asians in America'' by famous UCLA south Asian expert Stanley Wolpert.
At its annual January meeting held in New Delhi in collaboration with FICCI, GOPIO had urged the then Vajpayee government to appoint a full-fledged minister for NRI affairs.

``We are happy that the new government has fulfilled our demand. But the issues like dual citizenship are still tangled in technicalities,'' says Singh.

GOPIO's ``milestone Brussels conference'' is being attended by NRIs from 25 countries, including Britain's Karan Billimoria, CEO of Cobra Beer, Sanjay Dalmiya of Dalmiya Industries, FICCI, etc.

``Our aim is to raise the profile of the NRI community in the European Union. Over the years, GOPIO has developed effective working relationship with the key people in EU and Brussels-based missions of those countries where NRIs/PIOs live in large numbers. We have roped in EU officials of Indian origin, including MP Neena Gill, for our task. One-third of London's economy is controlled by Indians and other Asians.

People like Swraj Paul and Billimoria went there with nothing and today they are millionaires, give jobs to thousands of Europeans and pay huge amounts of taxes to these countries. Though EU is India's largest trading partner, major contributor of development and home to a large and influential Indian diaspora, these countries have not recognized their contribution.

Our interaction with EU aims to change this. Though Western media carries stories about India, a lot remains to be done to tell the world that India's burgeoning self-confidence is not just political propaganda. The Indian economy has achieved 8.4 per cent growth and its forex has surpassed $109 billion. As the Indian president and the prime minister have said, the country is set to join the ranks of developed nations,'' says Singh.

The Indian diaspora, he says, has brought respectability to Brand India by their achievements in recent years. ``Young Indians like Gandhi and Nehru who went who went to England for higher education before indpendence are credited with getting India freed from British rule.

``Later when the young people who went for higher education to the U.S after independence, they contributed tremendously to India's financial emancipation, technology revolution and Green Revolution. And today's young generation of NRIs has shone in IT and other professions. Thanks to them India has become a respectable brand name now. Dozens of Indians hold top professional positions in the West. Silicon Valley is full of Indian super-achievers. There are seven Indian MPs in the Canadian House of Commons and three in the British House of Commons.

During GOPIO's interactions with these people, we found that all of them are so eager to work for their motherland. India should get out of the third-world mentality as it does not behave its stature any more,'' he argues.

As he points out, not many American Indians know that an Indian -- Dalip Singh Saund -- became the first Asian to serve as a Congressman (for three terms in the 50s and 60s) in US history. Thanks to GOPIO's efforts a resolution has been introduced in the US Congress to install his portrait on Capitol Hill and issue a stamp in his honour.