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Protecting real estate investments of Indian migrants

Sanket Mohapatra's picture
  Photo © iStockphoto.com

In the last few years, many Indian migrants (non-resident Indians or NRIs) have experienced strangers and even relatives taking over their land, tenants refusing to vacate their apartments, and sometimes being cheated by real estate developers. Complex and long judicial procedures have not helped matters. The Ministry of Overseas Indian Affairs, which has been flooded with complaints, organized a session on this issue at the Pravasi Bharatiya Divas, an annual meeting of NRIs in New Delhi this January (see session description and story). India’s buoyant real estate market prior to the current financial crisis appears to have contributed to this phenomenon (see story).  

The extent of these problems in the Indian state of Punjab and effective advocacy by NRI Punjabi migrant associations led Punjab’s government to designate certain police stations for NRIs in six districts, set up special revenue counts, and more recently, to create a State Commission, to speed up the resolution of their land and property disputes. Punjab’s Rent Act has been amended to make it easier for NRIs to evict tenants. India’s central government has asked states to appoint nodal officers for civil, judicial and police matters to respond to similar complaints. Although the effectiveness of these measures remains to be seen, these steps are a welcome recognition of the contribution that India’s emigrants make to its economy.

Indian policymakers in general have become more attuned to catering to the "Global Indian". Their substantial remittances of $45-$50 billion (depending on the specific period) have no doubt helped to focus policymakers' attention. Remittances have more than halved India’s current account deficit and helped to stabilize its balance of payments position during the global financial crisis.

With the size and benefits of remittances now well-recognized, the focus of Indian policymakers has now shifted to attracting investments from migrants, and the migrants themselves, back home. The Pravasi Bharitiya Divas in January was attended by top political leaders, including India’s Prime Minister Manmohan Singh, and non-resident professionals, business leaders and entrepreneurs. Promises were made to provide more opportunities for investment in India’s burgeoning infrastructure sector, protect those affected by the global crisis, and to promote greater participation in India’s governance by giving Indian citizens abroad the right to vote in future (see story). Policymakers are attempting to lure back academics abroad to proposed innovation universities by providing more flexible working conditions and other incentives.

As Punjab's example illustrates, more needs to be done to address the issues faced by India's emigrants. Many of India's 10 million emigrants are unskilled or semi-skilled workers in the Gulf countries and earn substantially less on average than their more educated counterparts in the West. Recruitment contracts are often opaque, and migrants sometimes end up with employers confiscating passports, lower salaries than promised, long working hours and crowded living conditions (see study). Returning is difficult for many given the need to repay large debts incurred during the migration process. The Indian government is considering a number of measures, including setting up a welfare fund for Indian migrants in the Gulf.  

Punjab's efforts at resolving land and property disputes of its emigrants is just one of numerous initiatives that governments across the developing world have launched to protect the rights of their emigrants, and to tap into their substantial financial and other resources. One lesson from Punjab's experience is that the responsiveness of governments and their willingness to understand the needs of their overseas citizens and migrants, and to adapt accordingly, is a critical component of any such strategy.