Thursday, 29 September, 2022
HomeOpinionWhy well-to-do Indians are fleeing the country and economists aren't returning

Why well-to-do Indians are fleeing the country and economists aren’t returning

The economic refugees of old have been replaced by well-placed people leaving (or staying away from) India’s unattractive political economy.

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Montek Singh Ahluwalia, in his non-memoir, Backstage: The Story behind India’s High Growth Years, recounts how he and wife, Isher, decided to return to India from Washington 40 years ago, giving up attractive careers at the World Bank and International Monetary Fund (IMF). Montek joined government as an economic adviser in the finance ministry, and Isher joined a think tank. They would have had modest salaries and below-par government housing, but they felt they were contributing to India’s development process. Along the way, they became the capital’s power couple, so life had its compensations.

Other economists too came back around the same time, some earlier, and some later: Manmohan Singh, Bimal Jalan, Vijay Kelkar, Shankar Acharya, Rakesh Mohan, and so on. They returned after studying at the best universities and working in plum jobs at international organisations. They and others like them became the leading makers (or influencers) of economic policy for the next three or four decades, rising like Montek to high offices and enjoying good reputations, plus of course the bungalows of Lutyens’ Delhi and social cachets that would not be available to them elsewhere.

The question that was posed earlier this week at the release of Montek’s book was: Why aren’t people like them coming back today, bag and baggage, to set down roots here in India? The ones who came more recently were clutching the green cards that gave them an escape hatch through which to return to green pastures: Arvind Panagariya, Raghuram Rajan, Arvind Subramanian, and other perfectly honourable gentlemen like them.

One answer is that India has always had economic refugees, and they went where they could find jobs (in West Asia and Singapore), or a better education that would underwrite good careers. Many have done brilliantly, heading global tech giants and winning Nobel prizes. But there is a darker side to the story. Although India is no longer the desperately poor country of the 1980s and 1990s (having risen a few years ago to lower-middle income status), has ceased to be an economic prison like Cuba, and offers more career options with higher salaries, vastly superior cars and consumer goods, modern hospitals, and new liberal arts colleges, and the simple freedom to travel without signing “P” forms and getting eight dollars to take with you, it seems to have become a less attractive country in which to live and work.

Also read: Sitharaman should first let people know what state of economy is: Montek Singh Ahluwalia

Businessmen, including some with recognisable names and faces, are becoming “overseas citizens”. They are investing more in other markets where life is simpler. Wealthy professionals with internationally marketable skills and degrees are also taking their money with them (prompting the finance minister in her Budget to introduce a tax on such money transfers). They may be fleeing tax terrorism, prodded by more limited economic opportunities than they had imagined, or simply keeping one foot in India and another overseas because public discourse here has acquired a nasty edge and who knows what’s coming next. Or perhaps it is just the air quality in our cities which is a deterrent. Whatever the reason, the economic refugees of old have been replaced by well-placed people leaving (or staying away from) India’s unattractive political economy. Diplomats from under-populated countries like Australia and Canada report a sudden increase in the number of Indians seeking to emigrate.

The other question is, should our economists look back with satisfaction, or in anger? To be sure, there were high points like the reforms of 1991, the years of rapid growth a decade ago, and transformation in sectors like telecom. But we should not have waited till 1991 to launch the reforms. As Montek writes, Rajiv Gandhi was warned by the IMF chief in early 1988 that a crisis was building up, but he did nothing. The telecom revolution here was not special to India; other countries too engineered dramatic improvements in tele-density. Nor were India’s years of rapid growth unique; emerging markets as a whole grew at 7.9 per cent in 2004-08. Forget China, today India is being bettered in trade by Bangladesh and Vietnam. And the Thai baht is worth Rs 2.25; it was half that in 1991.

By Special Arrangement with Business Standard

Also read: Modi hasn’t done so badly on the economy. But more needs to be done on many fronts


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  1. It is not because of the government, it is because of us, we Indians do that, there is quality education in government schools, but because their parents are illiterate they cheat and score marks. Education system could have been the best only if our mind sets were good. We have studied so much and still we split on road. If the talents stay here India will definitely become developed but that is not happening at all, those who study here are greedy to go USA 🇺🇸 and get a job in google. The 1 billion population left are poor and this is why per capita income is so low. I know that even after reading this you guys won’t change your habits of throwing garbage on the road and I pity those who actually want to make India developed. Stop blaming the government, it is all because of us this has happened. Nowww,,, tell me, you guys compare India with countries like Japan, and South Korea . Just look at their population! China is more developed with higher population as China is not a democracy and was never captured. India is only a 74 year old country and you cannot expect it to become like New York in 1-2 years. Stop dreaming!

  2. It’s interesting to see how humans tend to justify anything when they turn bhakta! You simply loose your capacity to analyse and irrationality becomes order of the day, everything becomes a ” Bhagwan ki leela”
    People, who can afford to run away are moving out simply because they don’t see any hope.

  3. What a load of bull! Why do you care about who is coming back or not? India has enough resident talent to take care of herself, no need for phoren educated saviors – we have already seen a joker named Rajan. Grow some self respect! Oh I forgot, losing self worth is a prequisite to become a lefty-liberal bot.

      • In a debate the one who gets personal is the one who doesn’t believe in self. Also, part of the problem i s that in India we arent taught the art of debate. In my class I have a session once in a month- We pick up any point which has two compelling but opposing narratives. We ask who is on Side A and who is on Side B. Then we ask both sides to represent the case of the other. Now what happens is that these students are perplexed- they find it hard to look through the other side. The winner is the one who presents a logical argument for his case which he did not believe in.
        The fundamental premise for believing in something comes from what our background is, our parents and the way we are bought up. This is called conditioning. All of us are conditioned. But when we are asked to represent the other side with the same passion all of us fail.
        A successful lawyer is the one who can represent a case from both sides and yet win.

        This is a powerful way of teaching and i use it all the time. And my topics can be abstract – e.g. Pencil as universal writing instrument versus Pen for writing by adults. It can be a controversial topic also- like – Hanging of Rapists versus Punishment and Rehabilitation.
        Or we pick up topics like language, race, colour, food, laws. politics.
        I suggest we all try it once. See how all of us start to know one new part of ourselves.

  4. ‘The grass is greener and the lass is leaner ‘principle is the cause of many qualified and well to do Indians preferring to move abroad,There day to day life is hassle free,and much of your time and resources are under your control to do what you please. You work culture and life is healthy,corruption free and ensures an affordable family life ,No crowds,dealing with Govt,banks etc ,no time lost and merit and talent in demand and mostly an open society,
    We in India, in spite of culture and past history,people have to struggle for their day today life,income
    distribution is skewed,traffic congestion,and pollution and crowd wherever you go,govt,not knowing what to do and above all after so many decades,people not finding any direction for hope to see light at the end of the tonne what else can one can expect?

  5. I pity the people trying to make Canada their home.

    They will have to find out the hard way that Canada only wants people to do their unskilled factory and restaurant labour. That is not an exaggeration.

  6. Who in their senses wishes to live in India with it’s overflowing crowds, pollution of every kind, traffic jams, horrendous commuting times, corruption, poor education and healthcare, extortionate taxes etc. The question to ask is why even the worthies like Montek Singh etc who returned failed to make even an iota of difference in government policy and thinking. Even now India follows the same old failed socialist policies. The biggest reason for people to leave now is that they have lost hope in India. Irrespective of which is the ruling party the policies remain the same. The Mahatma was prescient when he said ‘ Quit India’.

  7. True , Modi has lost control over his economy developmentPlot. He says Startup India. Next day start-up is asked to pay Angel Tax. He praised India’s low cost Internet to US audience and next day the Telcos are asked to pay hefty penalty. Promises that petrol price will be market driven but in practice it remains almost same while Crude oil prices came crashing down from 104 dollars to 54 dollars.

  8. Just plain greed – nothing more nothing less. … I know even declared communists, giving gali to capitalism all the time, given an opportunity – they migrate all to the US and seek US citizenships. Love your own people (nationalism) commitment to your people and an enormous amount of self-respect that can prevent this migration…
    But since independence – this nationalism, oneness with fellow Indians feeling is vanishing, people are seeking a good life for themselves. You see only one life 🙁
    And our school curriculums are designed for this, including IITs.
    The middle class is obsessed to escape – this also explains the rush to get into IITs.

    • The greed is from the government and not the common citizen looking to exit. Anything that moves gets taxed and you get nothing in return. Public money is lavishly wasted on HIndi imposition, freebie schemes, politician foreign tours, while certain class of people like rich agriculturalists and politicians remain exempt from taxes. And to top it all the recent tax procedures for already existing tax payers have only got more complicated. Dividends are being taxed to please foreign domiciled investors.

      The government be it BJP or Congress is just a broker for foreign institutions.

  9. Manmohan Singh, Bimal Jalan, Vijay Kelkar, Shankar Acharya, Rakesh Mohan, they all had experience, exposure and skills needed for a different type of economy which the Indian economists of those days did not have. Most of them could easily merge with the English speaking rulings elites and were given a special status.
    The Air-hostesses of those days were suitable to marry in Political, Babu and India Inc. families not any more.
    The economists of today coming from Us and UK come, do their jobs and get well paid and return. With the dwindling numbers of elites in power, once the job is done there are no special privileges available for keeping them here.
    Majority of the big names in businesses are running away for the fear of their pasts catching up. No more jugads available for getting tips and running away before getting caught and Passports impounded.

  10. You know things are definitely awry when acquaintances who detest certain religious countries and their citizens, are now willing to go to those countries to work. Some of them try desperately to emigrate to the West even after a lifetime of boasting how their own culture is superior to Western culture. It is funny to hear them justify their decisions. Anyway it is clear that they dream of a certain kind of India … as long as they don’t have to live in it.

  11. Well said Mr. Ninan. But i think you are over-analyzing. whether one is rich or upper middle class or just middle class, there are some simple reasons why people want to flee the country – 1. Arbitrary and unfair nature of everything in India – nothing is guaranteed to anyone except the top 1% or less of the population (politicians, bureaucrats, rich businessmen and celebrities to some extend). one can pay his/her fair share of honest taxes, be a responsible citizen and live up to the highest standards, still the system treats him no differently than an crook who fleeces the system. It is because, he can live a model life, still get treated unfairly but tolerate it all and then one fine day his only child becomes roadkill because an ill placed flex board, placed by some local politician’s sycophant sidekick, fell on her when she was returning home after a day’s hard work. It is because, he/she has to tolerate encroachment on his liberty and freedom to be extra safe so that he/she never becomes the victim of a crime, because once it happens it will take a generation or more for the courts to deliver justice. It is because, the government taxes him thrice – when he earns, when he spends and when he gains returns on his investments, and still after paying all these taxes he still has to send his child to a private school which charges exorbitant fees which the government fails to regulate, or has to go to a private hospital with ridiculously high charges to get care that doesnot kill him, because the government cannot provide these facilities to him and others with his tax money because all that tax money is only barely enough to feed the corruption everywhere. And to rub it all in, the government makes him pay 18% or 28% service tax on these exorbitant charges mentioned above.. Does anyone need any more good reasons?

    • Contrary to your view, Govt Hospitals are quite good. There doctors are appointed after qualifying public exams and facing open competition. Even Govt schools are good, because all teachers are appointed after qualifying public exams, unlike private schools where there is possibility of appointment based on links/nepotism.The real problem is the mammoth population competing for fewer resources and it is beyond the capacity of any govt to cater to all people.

  12. With all the geniuses roaming in the Indian streets, India could not stop looting right and left. In fact, these geniuses looked the other way when her motherland was ripped apart by some greedy vultures. they did it to safeguard their own interests.

  13. India is a populist, multi-party democracy, with a socialist DNA and where a majority of our population by design or by chance still live in a pre-industrial world.

    Reforms in a country like ours cannot take place without an immediate crisis, like balance of payments crisis that preceded the 1991 reforms.

    Modi tried his hands with reforms in his first year as PM, he brought a new ‘Land acquisition bill’ to facilitate the process of land acquisition for entrepreneurs. What happened?
    The opposition including the neo-liberals didn’t waste a second to paint him as the enemy of the poor and farmers, as “Ambani-Adani ka yaar” etc. coz they wanted to harm him politically.

    Nobody is serious about reforms in this country they all have their egos and ideological wars to settle first. I have seen some of the most ardent market economists becoming Nehru lovers just coz they hate Modi

    • so true. I had voted for Modi and had high hopes from him especially after he won with a bigger mandate in 2019. But looks like he is squandering away all that goodwill on social changes such as CAA or Ram temple. If someone like him, without a dynasty to follow him and riding such a huge wave of popularity, cannot bring in politically risky measures such as land/labour reform or aggressive disinvestment or closing up loss-making PSUs such as Air India, who can?

  14. Ninan has raised a pertinent issue. Many countries outside offer much better ease of living, life style, infrastructure, environment (though not very good climate- either too hot or too cold) and economic opportunities. Life is not cheap outside but life is predictable and pay your taxes, follow the law of the land and you are set for a normal good life. Corruption in routine life is just not there. But the important point is- thanks to opportunities abroad, possessing required job skills along with easy of travel, the choice has become very easy. If there is an opportunity to go out, why would somebody want to stay or come back to India and face corruption and delay in its government offices, courts, traffic, pollution, poor infrastructure etc etc. when one has a choice!

  15. But we are proud Hindus! That will be Modi’s legacy: Hindu triumph and economic disaster. Who needs money when you have religion?

    • And when did Islamist named Amit Shah or Modi become Hindus in the first place??? If they are Hindus, they should stop the fixation with that Islamic invaders language Hindi/Urdu.

      Those massive Halal meat factories like Allana, Al Dua, Al Kabeer which they have financial links say a lot about them.

      Hindification of India is nothing but Islamification of India

  16. NDA-2 under Modi has adopted the model of Indira Gandhi in early and mid-1970s, of high taxes, punishing the rich and thereby claim to be pro-poor. Modi government is recklessly indulging in vote bank politics. Now there is a proposal to hike the creamy layer of OBC reservation to Rs.12 lakhs a year. How can a person earning close to Rs.1 lakh per month be still backwards. A brahmin earning Rs.50,000 a month is forward, but a OBC earning Rs.90000 a year is backward. How shamelessly can one pervert the economy?

  17. Ninan has thrived under congress regimes…where his word was honoured, all business and people in govt were interlinked to an extent one could always buy an exception to the rule on regular , all you need is to be friend Ninans of the economic world. One can influence banks , financial institutions etc. Unfortunately those days are over, accountability is the buzz,all those influencers have no place, that’s why the hear burn. Its good one should get use to rule of law

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