Feeling Insecure, Millionaires Are Leaving India In Hoards
By Abdul Rashid Agwan
01 August, 2015
Whereas successive Indian governments are striving to promote FDI since economic liberalization in 1991 by attracting overseas capital with investment and technological transformation in view, India is facing a ‘reverse osmosis’ of Indian billionaires and millionaires who are leaving the country in huge numbers to settle anywhere in the developed world.
It has been reported that 61,000 millionaires have left India during the last 14 years in search of peace for themselves and quality education for their children. This gives an increasing rate of migration of around 4,500 tycoons a year, which should be taken worrisome by any count.
A joint report by New World Wealth and LIO Global, released this week, analyzes that the number of Indian super-rich deserting the country was second only to China, which suffers from an outflow of 91,000 of the class, intending to change their geographical locations during the same period.
In the row, the countries that face exodus of their moneybags comprise France (42,000), Italy (23,000), Russia (20,000), Indonesia (12,000), South Africa (8,000), Egypt (7,000), etc.
The report says, “Indian HNWIs (high net worth individuals) tend to move to the UAE, the UK, the US and Australia.” However, United Kingdom remains the first choice of the rich migrants where 1.25 lakh of them from different parts of the world have acquired home during the stated period.
Another insightful report of the year, published by Capgemini and RBC Wealth Management, says that there were 198,000 millionaires in India in the year 2014. That gives a figure of more than 25% migration rate of money magnates of the country in a decade.
Recurring communal riots, terrorism, Naxalite violence, corruption, bad governance and the sorry-state of Indian education system are rendering many disgusted with future of the country and those who can afford to leave it for some safer and peaceful havens are increasingly opting to change their nationality. It is a known fact that violence causes large scale displacement of communities, which tend to shift their location to some safer niche. This has been seen within India too. When large scale violence broke in Mumbai in early 1990s, it impelled transfer of economic activities from there to other cities such as Pune, Bengaluru, Hyderabad, etc.
The uncontrolled communal violence in Mumbai, just after the demolition of Babri Masjid on 6 December 1992, provoked the leading tycoons of the financial capital to go and meet the Prime Minister PV Narasimha Rao and pressurize him to do something serious for stopping bloodshed in the city. During the 2002 Gujarat mayhem, it was the Gujarat Chambers of Commerce and Industry that came out on streets as the first agitators against the domineering chaos, which brought commercial activities in the state to standstill while causing an enormous loss of Rs 11,000 crore. These instances make it evident how much the business community could be sensitive to violence.
As the survey of the New World Wealth and LIO Global used a sample which targeted only high-net-worth individuals having net assets of $ 1 million or more, the flight of money with rich families having lesser net asset may be even more, making the tendency further vital for all concerned.
This is an alarming situation for the country where conditions are not perceived conducive for leading a happy life by the prosperous community, apart from the common men.
In a way, it is another kind of braindrain which adds into the already prevailing massive national loss due to migration of doctors, engineers, scientists, technocrats and other experts to foreign countries aimed at permanent settlement over there.
It has recently been estimated by an Australia-based think tank that India has to go without an amount equivalent to Rs 2,173,273 crore in the year 2014 due to prevailing violence in the country. Even with the minimum asset transfer of 61,000 millionaires during the last 14 years, i.e. $ 1 million, India would have lost at least Rs 366,000 crore since 2001, mainly due to violent activities in the country, averaging to Rs 26,143 crore a year.
There is reason to believe that the said annual capital loss should be on the higher side by now, as the prevalence of economic recession and terrorist threats in the desired destinations would have dissuaded Indian entrepreneurs during the past decade to shift, apart from comparatively better political environment at home at that time.
The migration of super-rich from the country due to insecurity of life is adding into the mentioned whooping economic loss in the account of violence, which exists due to the thronging hate groups here and there. The rampant corruption, bureaucratic apathy and many shades of discriminations are also spawning restlessness among sensible citizens here.
The shocking trend gives an additional burden to policymakers to think on and alleviate the predicament which denotes that highly trained experts and a large number of super-rich individuals of the country use the national wealth for building their individual career and riches by using public systems, and when the time comes to repay the nation, they say it goodbye for some better pastures elsewhere. This indicates about a poor quality of patriotic sense in the class.
Though it is hardly appreciated, the patriotism of the NRIs working in the Arab countries seems stronger than the elitist migrants to the ‘developed nations’ as could be marked from the fact that the remittances received from the region overshadow the amounts remitted from the developed nations.
According to the Ministry of Overseas Indians Affairs, 25 million Indian Diasporas forward their remittances to the country annually, which was recorded to be $ 70 billion in 2013-14. It was almost double the amount received under FDI in the past years on an average. The RBI noted that 30.8% of the total foreign remittances in 2012 were from West Asia, compared to 29.4% from North America and 19.5% from Europe. This is in spite of the fact that the wage structure in the Gulf region is not as gainful as in the Western world.
In a politically charged system, leading to recurring debates on the patriotism of Indian citizens, the awesome exodus of the creamy layer of the country after consuming its precious resources should prompt a deeper insight and suitable policy implications. There is also a need to tame the pro-violence hate groups, which are doing more harm than any good to society. Particularly, they are eating out hard earned national wealth by all sections of Indians.
[Contributor is a social activist, analyst and author of many books including his recent one, Islam in 21st Century: The Dynamics of Change and Future-making]
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