NRIs sent $20 billion from Arabian Gulf Countries

* India recieved $23 billion remittance during 2005-06 from NRIS
* Non Gulf NRIs contributed only $ 3 billion
* A whopping amount of $ 20 billion was from Arabian Gulf
* Kerala recieved  the huge portion
* FDIS from GCC exceeded $ 2 billion this year
* India calls for more Arab investment

Nov 13, 2006,

New Delhi, Nov 13 (IANS) India Monday reiterated its solidarity with the Arab world, home to over a four million strong Indian diaspora, and called for converting longstanding historical and civilizational ties into a vibrant economic partnership.

‘We should use attitudinal ties between people to enhance trade linkages between India and the Arab world. Oil-exporting countries of the Arab world, in particular, should increase investment in India,’ Finance Minister P. Chidambaram said in his inaugural address at an international conference at the Vigyan Bhavan convention centre on promoting India-Arab economic relations.

The two-day conference, which is being attended by ministers, diplomats, academics, business and opinion leaders from India and Arab countries, has been organised by the Indo-Arab Economic Cooperation Forum and the Institute of Objective Studies.

Underlining India’s centuries old multi-faceted ties with the Arab world, Chidambaram spoke about geographical proximity, long-standing cultural and trading ties and ‘unbroken relation of cordiality’ between the two sides.

He, however, rued that the foreign investment from Arab countries in India are much below potential. Even rich Arab countries are not investing in India enough, he said.

To further accelerate bilateral trade and investment, the minister said that India will be signing bilateral investment protection agreement with more Arab countries and discussions are already going on for negotiating a free trade area (FTA) between the two sides.

Calling Indian workers in the Gulf countries ‘an investment of human capital in the Arab world,’ Chidambaram said remittances from Indians working in these countries worked out to a whopping $20 billion. In the first quarter of this year alone, remittances have exceeded $6 billion, he said.

Bilateral trade between India and the Arab world has been growing steadily and will scale new heights in the future, he said. FDI from Gulf Cooperation Council (GCC) countries has exceeded $2 billion this year.

Besides the continuing cooperation in energy sector, the Arab countries supply nearly 30 per cent of India’s crude oil needs, IT, infrastructure, biotechnology, nanotechnolgy, and financial services are key future areas of bilateral cooperation between India and the Arab world.

Anwar Ibrahim, former deputy prime minister of Malaysia, lauded the rise of India on the global stage and praised the strong fundamentals of India’s economy as exhibited in its high economic growth and its increasing attractiveness as a hub of investment for the world.

Alluding to Indian Nobel Prize-winning economist Amartya Sen’s concept of ‘development is freedom,’ Ibrahim, who was the guest speaker, said that the Arab countries should take a ‘closer look’ at India and called for balancing economic growth with a more humane social order.

‘In India and the Arab world, we have to maximise the opportunities that globalisation is creating to ensure that there is inclusive and all-round growth in our regions,’ said Mohammad Manzoor Alam, president of Indo-Aran Economic Cooperation Forum.

India received the highest inbound remittance estimated at $23 billion in 2005-06, while China received $21 billion. In 2004-05, China received $20 billion and India received $18 billion.

Interestingly, India received the highest inbound remittances with only 22 million non-resident Indians, while there are about 40 million Chinese residing outside China. Western Union managing director (South Asia) Anil Kapur said this was primarily due to the social and family structure in India.

Interestingly, India received the highest inbound remittances with only 22 million non-resident Indians, while there are about 40 million Chinese residing outside China. Kapur said this was primarily due to the social and family structure in India.

“The number of Indians going abroad is increasing every year and the money coming into the country in the form of remittances is also swelling,” MoneyGram International country manager Harsh Lambah said, adding the industry is all set to witness further growth. As per an estimate, about half a million Indians migrate annually.

Kapur also said this industry needs to be more organised as it would directly add to the foreign exchange kitty. Remittances are high in all the southern states, apart from a few in the north like Punjab.

It’s official: India’s dazzling growth fails to dent poverty

Mahendra Kumar Singh, 19 Oct, 2006 TIMES NEWS NETWORK

NEW DELHI: Economic growth may have been spectacular since 1993 — that is, post-economic reforms — but it seems to be trickling down rather slowly.

A soon-to-be-released official report has estimated that poverty declined by a mere 0.74% during the 11-year period ended 2004-05. Although there are signs of things moving a little faster, at 0.79%, between 1999-2000 and 2004-05, going by another measure, the number of people below poverty line may have remained unchanged.

National Sample Survey Organisation’s (NSSO) findings show the number of people living below poverty line (BPL) at 22.15% in 2004-05, compared with 26.09% in 1999-2000. In the same period, the country’s GDP grew at around 6%.

This mismatch between growth and its distribution is politically worrying as it indicates a rise in economic disparities. Economists say uneven growth often leads to social unrest which, in turn, can cause problems for politicians.

Anyone consuming less than 2,100 calories in urban areas, and 2,400 calories in rural areas, is classifed in the BPL category.

The NSSO study also shows that poverty declined the sharpest in the poorer states.

Study: BPL population up in Delhi, Maha and Haryana

NEW DELHI: A National Sample Survey Organisation’s study suggests that while economic growth is trickling down very slowly, poverty has declined the sharpest in the poorer states.

Leading them were Assam and the north-eastern states, where people below the poverty line decreased by nearly 4% annually, followed by Jharkhand (2.51% a year during the five-year period), Chhattisgarh (2.15% a year) and Bihar (1.69%). Apart from the slow reduction of poverty, government also seems worried about a lower decrease in poverty ratios in urban areas, compared to rural areas. BPL population in rural areas decreased 4.68% between 1999-2000 and 2004-05, which was over twice the pace of the decrease in urban centres, estimated at 2.12%.

The trend of slower poverty reduction in urban areas, say economists, could be due to migration of the poor from rural areas. But they wonder whether if that is indeed the case, then the rate of actual decline of poverty in rural areas could be over estimated.

The NSSO findings also reveal an increase in BPL population in Haryana, Maharashtra, Delhi, Rajasthan and Goa. This is possibly because migrant labour is moving out of Bihar, Uttar Pradesh and Jharkhand to these states in search of jobs.

There are also fears that dipping state growth rates, as witnessed in the case of Maharashtra, have added to the increase in the BPL population. Among the poorer states, Orissa has the highest proportion of poor — nearly 40% of its population is below the poverty line. The population of poor in Orissa’s villages decreased 8.36% during the five-year period while the urban BPL population fell 1.2%.

Next in line is Jharkhand, which had a marginally higher BPL population of 47.40% compared to Orissa’s 47.15% in 1999-2000. At the end of June 2005, Jharkhand’s poor constituted 34.83% of the state’s population. Bihar remained in the third spot with 32.57% population under BPL.

The estimates were prepared using monthly consumption expenditure of individuals during 365 days on clothing, footwear, education, durables in addition to their medical expenses. This method is called the Mixed Reference Period Method (MRPM). Going by the other measure used by NSSO — Uniform Reference Period which measures poverty based on every consumption for the last 30 days of the survey — BPL population accounted for 27.81% in 2004-05, compared with 35.97% in 1993-94. Economists, however, believe that the methodology is suspect as consumption during 30 days is not the right measure and the government, too, prefers MRPM.

213 million Indians will be unemployed by 2020

NEW DELHI (IANS) August 16,2006
A national report on the employment situation in India has warned that nearly 30 percent of the country’s 716 million-strong workforce will be without jobs by 2020.

The report prepared by the recruitment agency TeamLease Services said that the shortage of employment in India can trigger many social security problems as the bulk of the unemployed – 85 to 90 per cent – will be in the age group of 15-29.

The study titled India Labour Report presents the shortage of jobs as the flip side to the much-touted young workforce in the country. It said 213 million Indian without jobs would be a huge task for the government to manage.

It said the quality of those employed in the future is not very encouraging as only 88 million will be graduates, while another 76 million will have passed their senior secondary level.

The bulging population and the expanding workforce will require about 15 million new jobs every year, against the 10 million new jobs being projected by the government.

The scarcity of job opportunities in the organised sector is likely to create a major shift towards the unorganised sector, which is already expanding and absorbing additional workforce.

Of India’s 402 million-strong workforce, only about 7 per cent is in the organised sector.

The unorganised sector is absorbing more labour and has improved upon its ’80s pace of 29.62 per cent growth to 30.29 per cent in the ’90s.
The organised sector, which is under the purview of labour laws, remains more rigid than the unorganised sector, which remains outside the reach of most labour laws.

The report estimates the annual financial “damage” to the exchequer due to the unorganised sector’s leakages in terms of tax revenues at 32 per cent of the total manufacturing sector GDP at Rs 162,000 crore (Rs 1620 billion).

“Unfortunately, labour legislation has been hijacked by a small minority of organised labour,” says Manish Sabharwal, chairman, TeamLease Services. The report lays stress on reducing unnecessary state intervention and over-legislation in the field of labour.

Luxury in India is Rs 65,000 crore business: Study

MUMBAI: The Indian customer is spending more on luxury items, whose market is pegged at a whopping Rs 65,000 crore and growing at about 14 per cent a year, a new study reveals.

According to the report by Technopak Advisors Ltd, India currently has 1.6 million households earning over Rs 45 lakh per annum, and each of these households spends about Rs four lakh per annum on such goods and services. The report categorised luxury households and also classified them into four distinct segments.

“While over 1 million luxury households have been slotted as luxuriented, the topmost segment 6-7 million have been termed very affluent, 10 million as getting there and up to 15 million upper middle-class households as mid-affluents,” Technopak Advisors chairman Arvind Singhal said. The research is based on a study that took into account households that earn Rs 40 lakh per annum or more.

The company met 4,000 affluent consumers in 12 cities and covered 17 products and services. Affluence has been defined by car ownership, overseas travel in the last six months and purchase of products in luxury categories.

The categories taken into consideration for the survey included clothing, fashion accessories, timewear, footwear, fragrances, jewellery and digital accessories, furniture and antiques, tableware, collectibles, fine dining and gourment food, wines and liquor, vacation, health and entertainment.

The market opportunity across these categories is estimated at Rs 64,000 crore and is accounted for by categories such as jewellery that has 27 percent of the pie, clothing 16 percent, digital accessories 13 percent, timewear 8 percent and cosmetics and skincare 8 percent.

Technopak’s knowledge company associate director Saloni Nangia said Indian luxury retailing has not taken off due to lack of proper atmosphere. “Organised retailing itself has taken off in India very lately. All the malls have been coming only recently. With more development on in Delhi and Mumbai better retailing atmosphere is being created. This will help in the future growth,” Nangia said.

However, she did not see much contribution of FDI in the segment’s future growth.
PTI