Kerala slow in tapping its overseas asset

Thiruvananthapuram | Updated: Jan 16 2006, 06:10am hrs
As nearly half of Indias Rs 84,000 crore NRI remittances come through expats from Kerala, it would be theoretically right to view the Kerala diaspora as the perfect domestic economic engine. But not yet, say the GSDP (gross state domestic product) fundamentals.

Income in the average Kerala household has not caught up with the galloping pace of domestic demand that NRIs (mostly Gulf-based) have whipped up in the state. In gold, in liquor and many white goods segment products, thanks to this, prices are higher than in other parts of India and a household without an NRI has a problem. After 30 years of remittance streams from the Gulf, it is only recently that the per capita income of Kerala (Rs 12,109 in 2003-2004) managed to cross the per capita national income (Rs 11,684).

The blue-collared Gulf-expat from Kerala is not a mover and shaker, as a dollar-rich or pound-packed NRI, says George Thomas, an Oman-based construction contractor. Of 32 lakh Keralites working in 105 countries, about 20 lakh are in the Gulf. Many of those working in West Asian countries are plumbers, shop-floor assistants or even camel herders. Even when they are doctors or nurses, diaspora-status is yet to spawn a business-driven wealth generator model, on the lines of an LN Mittal or Lalit Suri or BN Shetty.

At the same time, the remittance prop has started whirring, indicate recent trends. The recent slowdown in NRI deposits of Kerala banks is an index of capital migration to domestic avenues like gold, housing and even SSIs.

In 2005, there were two self-spawning infrastructure projects from Dubai-based investors, the Rs 2,118 crore Vallarpadom ICT Terminal and the Rs 1,500 crore Kochi Smartcity. Beyond the random NRI-run resorts, superspeciality hospitals or public schools, the diaspora-effect is given a cascading tilt. The Rs 4,000 crore Vizhinjam superport could also do with a robust diaspora trigger, says Jayakumar, an infrastructure consultant.

The most dramatic stimulus, perhaps by default, has been the dropping of its anti-FDI plank by the main opposition party, the CPI-M. This is pertinent, as elections and a probable change of guard are round the corner. The party had no ideological problems in ushering someone with Gulf business interests to the Rajya Sabha. State CPI-M chief, Pinarayi Vijayan, buzzed as the CPI(M)s chief minister candidate, says unequivocally, Diaspora is our wealth. And present CM Oommen Chandy says: An investor and an NRI are VVIPs to me. One awaits the effect on post-poll policies.