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Global Indians bring home anger, frustration, deep emotions and promises of investment

Amberish K Diwanji in New Delhi

The floor was thrown open to non-resident Indians to "share their experiences" about investing in India at the Global Indian Entrepreneur Conference in New Delhi. It opened up the floodgates and saw an outpouring of anger, frustration and deep emotions from the NRIs, who desperately want to do something for their motherland, and find that instead of being welcomed, they have to go through reams of red tape and corrupt officials at all levels!

An NRI began his epic saga of how he and a few other NRIs were shortchanged by the Karnataka state government way back in the 1980s. "The Karnataka government under the then chief minister Ramakrishna Hegde (coincidentally, now Union minister for commerce) asked me to set up an independent power project. I collected fellow NRIs and Rs 1 billion in New Jersey, and then the Karnataka officials went to New York and gave the entire project to someone else!" he said, still incredulous after all these years. "Now what do I do with my money? How can the Indian government expect us to invest in the country in expensive power projects when there is no sense of accountability?"

However, there was a touch of good news too. Union Power Minister P R Kumaramangalam was scheduled to meet this distraught NRI. So maybe he will still get the chance to pay back his motherland.

"You know, we don't really invest in India because we expect anything in return," Hemraj Chauhan, a manufacturer in the United States, told Rediff On The NeT. "If we wanted to make money through our investments, there are so many other places we could go to. We do it out of sentimentality, out of our sense of belonging. But at every stage we face a hurdle and after some time, we become disillusioned."

His friend, Bangalore P Neelkantaiah, who is also a manufacturer on the US east coast, seconded him. "We come from India and after all these years, we want to give something back. But it is very difficult because there is so much of red tape."

Both agreed that investing in India was not a rational judgement, but a sentimental decision. "After all these years, we have made enough money for ourselves and our children. What do we need the extra money for? So we are keen to invest in India, and even if I were to lose a couple of million rupees, I really would not mind," said Chauhan.

"Besides investing in much-needed infrastructure projects, we also invest in social areas such as schools and hospitals. But even here we often have to go through various hurdles," said Neelkantaiah.

The menace of red tape, the endless laws and rules to be observed, the sheer insanity of it all came out strongly. Finance Minister Yashwant Sinha has promised action to make it easier to invest in the country, especially for the NRIs, a section that the Bharatiya Janata Party is wooing assiduously. With sections of the BJP averse to complete liberalisation and the entry of multinationals, NRI investment is seen as a safe way out. But if the litany of complaints is anything to go by, clearly the government has its task cut out.

"The governments in India have lacked a clear policy towards NRIs," said Chauhan, "and they don't know where to begin. For instance, India faces an acute shortage of power, yet if I want to start a project, there are simply no clear-cut guidelines."

Added Neelkantaiah, "It is not just money. There are among us NRIs who have spent about 30 years in the US (Neelkantiah went to the US 33 years ago). We have the experience of working in a free market economy, we know how to set up greenfield projects. The government can very well use our expertise during this difficult transition phase."

Chauhan felt the worst aspect of it all was that no one seemed to care. "Certainly the ministers care and really want to help us out," he said, "but the lower level officials, with whom we finally have to deal with, they just don't give a damn. And that is where projects are stuck.''

Srichand P Hinduja in his speech to the gathering, said the government's mantra should be "implement, implement, implement!" Something the huge gathering of NRIs clearly seemed to agree with.

One NRI from Dubai had a suggestion. He said the government must give the bureaucrats a time limit to clear all pending projects, and penalise them if they fail to do so. But he added that should the project go awry, the bureaucrat must not be held responsible unless he was negligent or careless in clearing the project. "This will remove any fear in the bureaucrats from taking decisions," he said.

However, an executive with a German multinational, who lives abroad, said that while bureaucrats do take time in clearing projects, large firms do have a habit of behaving arrogantly and often seek to dictate conditions and terms. This tends to put off the bureaucrats and he advised a more sensitive approach.

P G Khemani of Ashok Traders, a Singapore-based export-import firm, also criticised the burdensome tax regime. "NRIs like me are extremely keen to invest in India, to buy property, etc. But besides the red tape is the fact that we have to pay capital gains tax. And what is discriminatory is that exporters in India are given income tax exemptions besides other government benefits. Why this disparity? After all, we also bring in foreign exchange every time we invest or buy property," he said.

Another asked, "Why do we have so many laws in this country?" He added that excessive laws, introduced during the licence-permit raj only gave officials a chance to harass investors and accept bribes, and must be done away with as soon as possible.

Another aspect touched upon strongly was corruption, mentioned by Ispat International Chairman L N Mittal (believed to be the richest Indian in the world) in his address to the session. Mittal pointed out how the south-east Asian nations believed that corruption was not an important issue as long as there was high growth, only to pay a heavy price. He warned that India must tackle the menace of corruption.

Other NRIs would only agree to readily, saying corruption touched them all at various levels. But as Khemani put it, "Thanks to corruption, some people face no problems at all in getting things done. They bribe officials at various levels and end up paying no or very little duty and taxes. In the end, it is the government that loses precious revenue."

All those who spoke agreed that what was needed was a change in the mindset of the officials concerned. Sinha tried to pacify the NRIs saying that India was still in the transition phase and changing the mindset will take some time. "But I can tell you it is happening. People are now clearly in favour of reforms and further liberalisation, though things do take time," he said.

The conference, organised by the Federation of Indian Chambers of Commerce and Industry and the Indian Investment Centre, is set to become an annual feature. And the NRIs seemed hopeful that in the future they would have less to complain about and more to be thankful for.

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