‘All NRIs aren’t quite as rich as you think we are’

Every so often, Indian politicians and organisations call upon Non-Resident Indians and People of Indian Origin to plough their money back home. They are told to use their dollars to adopt villages and take part in social projects so as to make a difference in the land of their birth and origin.

The call presumes that NRIs and PIOs are rolling in cash. But says Ram Krishnaswamy, an IITian, this is a specious premise. NRIs, he says, aren’t as rich as most Indians think they are; the Indian middle-class is richer. And Indians working in lowly jobs in the Gulf are doing far more for the country than Indians in hi-tech jobs in the USA, UK and Australia.

Instead of looking for the greenbacks of the NRIs, India would be better served if it tried to use their grey cells.


RAM KRISHNASWAMY writes from Sydney, Australia: Two years ago, I attended a reception for a Union Minister who had come to Sydney to make a big speech asking all NRIs to invest big in India and to attend the annual NRI yatra that was to be held at Bombay.

The Minister was expecting NRIs to queue up and pledge millions if not billions as was done by some Indians in Hong Kong and South Africa. He was most disappointed with the NRIs in Australia.

When question time came, the audience were suggesting to the Minister that for them to come to India to attend the meeting, they needed reduced fares in Air-India as well as free accommodation in Bombay!

I just chuckled and left the meeting convinced that the Government had it all wrong. As I was leaving the Intercontinental Hotel, I was confronted by a Group of Sardars who were yelling “XYZ murdabad!”. They asked me why someone like me would attend a meeting and listen to a murderer. (It was a Congress minister, for sure.)

If truth has to be told, my reading is that people living in India, especially the middle class, have a lot more spare cash than Indian NRIs. It is a myth that NRIs have a money tree growing in their back yards.

The majority of recent NRIs came abroad as students and started life with a huge mortgage hanging over their heads to do their undergraduate or masters degree.

As students they work about 20 hours a week, which is legal, in restaurants, car washes, telemarketing companies, petrol stations or as taxi drivers, just making enough to pay rent and food bills. This goes on for three to four years. During this period they feel home sick and visit family at least twice in four years spending whatever funds they have saved or money that they do not have by borrowing from friends.

At age 25, they get their first job, mostly in IT, let us say for a gross annual salary of $30,000 and a net take-home pay of about $2000 per month. All their focus in the next few years is all about getting permanent residence (as in Australia) or a Green Card in USA. Many have a masters in IT and work as tellers in banks or drive taxis as a full time job.

At age 30, the lucky ones get their permanent residence, while the unlucky ones return home broke or go underground, becoming illegal migrants living in fear of being apprehended and deported. Also around age 30, they get married to partners back home as arranged by their parents or find partners locally and live in de facto relationships.

With both partners working the disposable income at home is improved and round $3,000 and $4,000 per month. But then they have to rent a small two bedroom flat at $1,200 a month and the food bill comes to about $800 a month even if they are living frugally.

Then comes the urge to own a car and along with it come car expenses like registration, insurance, repairs and the fuel bills. Plus there are utility bills like gas and electricity, clothing and entertainment to pay.

By the third week in most young NRI households, all funds are gone and they are using their credit cards and waiting anxiously for the next pay packet.

In other words it is hand-to-mouth living for most young couples, in what is basically a Credit Card Society. There is no such thing as savings, especially with low interest rates it is just not worth saving anything in a bank.

At age 35, comes the first child and at 40, most Indians who value education enroll their children in private convent or grammar schools, with annual school fees being at least around $12,000 a year. Imagine having three children and having to fork out $36,000 out of the net income after tax?

At age 40 also comes the dream to own a property and a 25 -year mortgage with interest rates on the rise year after year. A mortgage that will not get paid off even when the man is 65 years of age unless he pumps in a lot more than the minimum required.

In the 1980s, the banks were pretty strict about who they gave out loans to. They looked at the employment record and your savings record and insisted on a minimum 25% as deposit. Today the outlook of banks is different. Banks are queuing up to give massive loans to young couples, knowing pretty well that these youngsters may not be able to discharge the loans.

House loans of the order of $35,000 to $50,000 are very common with minimum monthly repayments of about $1,500 to $2,000 a month. Last financial year alone the banks repossessed as many as 6,000 properties from young couples for defaulting mortgage payments.

At age 50, if one is lucky, he has done well career wise and has gone up the ladder to earn say $100,000 or $150,000 a year. It is only at age 60 that one may get a breather with children completing degrees and also working part time while studying. Mortgage and loans have been discharged.

It all flies so fast that you realise that retirement is staring at you and you have not put aside enough funds in your nest egg for retirement.

Add to this equation the annual or biannual trips back home to India to attend weddings, deaths, etc besides holidays. Let us not forget that 95% of NRIs are employees and mere wage earners. Then there are the unfortunate ones who get sick or lose their partners (mostly divorces) or even lose their jobs.

I am reminded of an NRI who died suddenly of a heart attack leaving behind a wife who had never worked and two young school going children.

The society at large believed the man was a well-to-do businessman living in a two-storey mansion in an upmarket suburb, with his children going to private schools, and he and his wife driving the latest BMWs.

Appearances can be so deceptive at times. Within a week of his death, both cars were leased were repossessed and within a month the house was on the market being auctioned by the bank. As for his flourishing business, well it was running at a loss and had to be would up totally.

While most friends sympathised, there was nothing any one could do to throw a safety net for this unlucky family. While this was the worst-case scenario, I am sure many are bordering on similar limits.

We then have another category of NRIs. Skilled workers like nurses, masons, carpenters, etc, who go to the Middle East. They earn pathetic wages, live in pigeon holes and live like slaves. They send money home for their wife and children, and save every penny to buy a property in their home town in India.

These are the NRIs who have boosted India’s economy as each and every one remits money on a regular basis. These people do not have an option of becoming citizens in the Middle East and have to return one day when their contract is terminated.

The Dinars and the Dirhams earned in the Middle East are much stronger than the greenback and hence the boom in real estates in States like Kerala.

Most of the NRI revenue to India comes from this group of people in the Middle East as compared to the NRIs in USA, UK, Australia, etc who have migrated for good and taken up citizen ships.

All it takes for an NRI to show off in India while on a holiday is an air-ticket charged to the Visa card, one thousand dollars (Rs 45,000) to spend, a few gifts for the family, and a video camera. If this is a family of four it will take them a year to pay off the holiday expense using the credit card.

We also have the oldies like me, professional doctors and engineers who migrated about 30 years or more.

Most of us oldies have spent half our life time in the country we migrated to seeking a better life. Our children were all born here and educated here and settled here for life. To our children India is another holiday destination and not the mother land as it is to first generation migrants.

Even when we retire we will remain where our children are and look forward to the grand children. Some of us may have our feet in both countries and there are others who have adopted the new country as the motherland.

The question is if the second generation Indians abroad are in fact NRIs. Most young NRIs born and brought up abroad, only associate with India when it comes to cricket but very little else and I do not blame them.

Given all this, now tell me how much money you can expect the million NRIs to plough into the 600,000 Indian villages?

It is unfair to assume that all NRIs are loaded and that they are tight with their money. The truth is that there is no money tree in their back yards. That NRIs are rich and loaded is a myth. Surely a small percentage have made big money but majority are just wage earners working for some one else.

The neo-rich NRIs have to show off to society how well they have done financially. It is a necessity to live in a posh suburb where real estate is expensive and to have an S-Class Merc or a couple of BMWs parked in the garage of a mansion with a swimming pool and a tennis court.

Try getting this class of Indians to adopt an Indian village and see what they have to say.

I believe the 300-million middle class people in India have much more spare cash than an average NRI.

Yes, I agree we need to do something to improve the wretched lives in the villages not by adopting villages or pouring your hard earned funds.

Charity, as we all know begins at home. If I have money to spare, will I give it to family members in India who are in financial strife or adopt some village ?

I do not believe in feeding the hungry fish but would like to teach them how to fish.

It is from this view point my batch mates have taken it upon ourselves to adopt a public high school in Alamathi village in Thiruvallur and teach them computers and graphics and web design. We also organise weekend coaching classes and the benefit is already showing in the school results of these children.

During my visit in 2004 we had these kids visit IIT Madras and I have made a pledge that the first student from this school who gets into IIT will be fully supported by me financially.

Here is a story that moves me and motivates me.

An army jeep driver returns to his village after 30 years in the army and finds that nothing has changed in his village and decides to do something about it. He is most definitely my hero and he is none other than Anna Hazare.

Last year we we had to raise Rs 1.5 lakh from our batch mates for the graduate dinner. Alumni in India were just as happy to donate Rs 5,000 as NRIs who donated US $100 each. Surely giving $100 from a $100,000 annual income (0.001) is much easier than donating Rs 5000 from an annual income of Rs 5 Lakhs ( 0.01)

I believe every individual should do whatever he is happy to and comfortable with. At age 60 most of us support one charity or the other. I am an ardent supporter of Jeevodaya in Madras which is a hospice for terminally ill destitute cancer patients and try to send Rs one lakh a year besides hosting the web site www.jeevodaya.com.

In Australia I support Salvation Army, Royal Blind society, Heart foundation and RSPCA by making a small annual contribution. My son Anand has adopted a child in Africa and sends money every month and this at age 23. I had nothing to do with this and I am most certainly a proud father.

Should I be adopting a village in India especially when I was brought up in the city of Madras ? I am not saying I will not but it seems far fetched.

If we IIT alumni are to give back something to society I do not think it is money but something tangible by using our collective brains.

(Thanks to Bhamy V. Shenoy)