The Hindu Business Line : Feting the NRI

FOR THE THIRD year in a row, non-resident Indians (NRIs) were feted at the Pravasi Bharatiya Divas jamboree, this time in Hyderabad, with all the unctuousness that marks occasions like this. It is one thing to honour NRIs who have made a name for themselves; it is quite another to indulge a constituency of foreign investors that has, so far, shown little willingness to invest in this country's development process on quite the same scale that domestic and foreign investors have. This time around, 11 chief ministers took their turn at the podium in an attempt to hardsell their respective bailiwicks. On a very abstract level, all the chief ministers sounded convincing about the competitive advantages of the regions they govern; Andhra Pradesh for the IT inclined, Bihar for those interested in agro-based industries, Maharashtra for entertainment, Gujarat for everything, because it is closer to China than any other State is, according to its Chief Minister, Mr Narendra Modi. On his part, the deputy chairman of the Planning Commission appreciated NRI investments over the last 15 years and hoped that the States would do enough to attract more of the same.

Ultimately, however, the Pravasi Bharatiya Divas was rather predictable in its outcome. After all the accolades showered on the NRI community and the appeals to its investible resources, the sad fact is that the NRIs have been more forthcoming with their complaints about this country than their money. While Indian policy-makers, from the Prime Minister to the Chief Ministers, play on the emotions of the overseas Indian, the guests do not seem impressed enough to loosen their purse strings. Last year, Lord Meghnad Desai spoke for the NRI community when he asserted that emotions did not play a role in NRI investment decisions, and that apart from their education in the IITs and IIMs, they owed little to India. Considering the efforts that successive governments have put in to woo NRIs for over 20 years and the disproportionately small investments by the overseas Indians during the same period, Lord Desai's assertion should have been pretty self-evident. But policy-makers have, of late, developed a tendency to play to segmented constituencies of investors when it is not at all necessary for them to do so.

All they have to do is simply point to the economy that has been growing at such a steady clip as proof of its dynamism; economic calculus, not emotion, is at work here. The climate today favours growth, and what better proof than the fact that resident Indian companies plan to raise more than Rs 4,500 crore through the primary market, and that foreign companies cannot wait to enter what is clearly a booming market. In the early years of reform, when foreign investors were reluctant to step onto our shores, it seemed right to appeal to the NRIs through florid roadshows. In 2006, the second fastest growing economy in the world can let economics rather than emotion do the wooing.