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Time for some homework

Steady remittances must nudge India to address the concerns of its migrant workers.

india Updated: Nov 23, 2012 21:43 IST

The diaspora is sending home shiploads of dollars and the World Bank reckons India will again top the list of recipient countries in 2012 with an estimated inflow of $70 billion in remittances.

Add to that a similar figure for information technology and outsourcing revenue - a twist in the migration story where the job, and not the worker, moves - and India's labour exports bring in almost all the hard currency we need to buy crude oil in the international market.

India ranks behind only Mexico in the number of people who leave the country to seek work. In 2010, it sent out 11.4 million. But while most of the 11.9 million Mexicans were headed for the US, only 1.7 million Indians joined them there.

The biggest corridor for emigration from India remains West Asia with the United Arab Emirates soaking up 2.2 million and Saudi Arabia 1.5 million. The European Union is the other big draw, but the figures are not captured in the World Bank's country-specific data set.

China, the only other country that can match India in labour exports, doesn't need to by virtue of being the factory to the rest of the world. Yet, it will pull in $66 billion this year, a steep climb from $619 million in 1992, when Indians sent back $2.8 billion.

This has to do with the skill sets the Chinese are exporting as opposed to the majority of semi-literate Indians that end up in West Asia. India tops only the list of doctors among high-skilled professionals that migrate.

Irrespective of their educational attainments, however, migrants are showing a greater resilience amid the economic downturn with global remittances growing 6.5% in 2012, and projected to grow at 10.7% in 2015. India gains from its widespread diaspora that reduces the risks of a recession in the EU and an enfeebled US economy.

The stability of remittances should nudge the government to look at three issues that could constrict these flows. The first is protectionist tendencies in the West against both outsourcing of jobs and allowing in migrants. India must leverage greater access to its own markets for free flow of its high-skilled migrant labour pool.

The government must also seek a degree of social security for expatriate Indian workers in the Gulf Cooperation Council countries. This is the most vulnerable section of the workforce India is exporting and deserves greater vigil because its remittance reaches an equally vulnerable section of society back home.

Finally, India must work at reducing the cost of transferring money. It still takes 5 cents to send a dollar from the US. Communications technology allows such costs to be brought down to a fraction of what they are today.