Updated: January 12, 2015 12:00:07 am
While addressing the Indian diaspora at the inauguration of the 13th Pravasi Bharatiya Divas on Thursday, Prime Minister Narendra Modi said that the economic development of 40 per cent of India’s population was connected to the Ganga. Modi may well have used the Ganga as a metaphor for reaching out to the Indian diaspora. Politically, the BJP has engaged far more with the Indian diaspora than other mainstream parties and this was also reflected in the PM reaching out to these groups during his trips to the US and Australia.
As External Affairs Minister Sushma Swaraj emphasised at the Divas, deepening this engagement could be rewarding at both ends — a successful, prosperous and politically influential diaspora is an asset to India, just as a strong and self-reliant India would be a source of inspiration for the diaspora.
In moments of crisis, the contributions of overseas Indians have played a crucial role in bolstering the country’s foreign currency reserves. In 1991, and after Pokhran, when sanctions were imposed by the US in 1998, and in the last episode of a forex crisis in August 2013 when the rupee was under attack, remittances from NRIs and investment in bonds by them had helped stabilise the currency. India raised close to $10 billion through two offerings between 1998 and 2000, and $34 billion through a special facility for Foreign Currency Non-Repatriable deposits or FCNR-B by November 2013, averting the need to approach multi-lateral lenders. Clearly, this is a resource group that can be tapped effectively.
With rising growth, the economic and political heft of the diaspora will serve to complement the country’s Track II diplomacy and global strategic initiatives. But to remain engaged with this over 25 million group, the government must move beyond mere rhetoric and measures, such as easing travel. It will have to ensure greater ease of doing business in India — by eliminating procedural hassles, ensuring faster approvals for setting up units and doing away with complex and outdated laws and rules, apart from breaking the parliamentary logjam that threatens to cripple the power sector and bringing in clarity and consistency in policies and tax laws.
That will create an environment for both local entrepreneurs and investors from the diaspora to put more money into a multitude of projects. Indian-origin investors understand the cultural context much better than other foreign investors and offer the promise of durable investment. A country that seeks foreign capital to fund its investment needs, especially to build infrastructure, must tap this potential resource, by making doing business in India a far less formidable challenge.
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