Centre for Development Studies (CDS) has been doing interesting work on emigration and the impact of NRI remittances on Kerala?s economy. This state vitally depends on these transfers?$5.8 billion in 2007 or 20.2 % of net state domestic product?from its Diaspora overseas. From field-based surveys of migration-intensive villages done by researchers like Raju Kurian, CDS has now scaled up its efforts statewide through its regular Migration Monitoring Studies (MMS).
The latest MMS 2007 round data?analysed in a recent CDS working paper by Prof KC Zachariah and S Irudaya Rajan?indicates stability in Kerala?s migration pattern. The number of emigrants (18.5 lakh), return emigrants (8.9 lakh), non-resident Keralites (27.3 lakh) and the proportion of households with a non-resident Keralite (25.8%) has remained virtually the same since 2003. ?Mobility has become, so to say, immobile,? argue the authors, adding that the ?era of large scale emigration from the state seems to be largely over.?
Emigration has had a big impact on the labour market of a state that has perhaps the highest unemployment rate (12.2%) in India. If among the unemployed, the emigration rate is as high as 43.5%, the process of going abroad for work lowers Kerala?s unemployment rate than it would otherwise have been. Internal migration has also made a difference to overall joblessness. Simultaneously, employment also significantly increased by over 3 lakh persons during 2003-2007, with a 100% increase in private sector employment and a 20% increase in self-employment.
But the biggest message of MMS 2007 is the shift from remittance-based consumption to remittance-based investments as the key driver of Kerala?s growth. In the early years of large-scale emigration, Gulf remittances went into subsistence, children?s education and housing. The return emigrants then also lacked the educational background or know-how to start businesses. But times are changing, as more than a million emigrants have returned with their accumulated savings and are ready to invest. Note that less than 2% of surveyed households used remittances for starting a business.
Much, of course, depends on the investment environment in the state, which determines how productively resources can be used. Unfortunately, Kerala is a laggard on this, in contrast to the experience of investment-friendly states like Tamil Nadu and Karnataka, which have harnessed resources from their non-residents and returned emigrants rather well.