The decision by Kerala to invest in training and ‘export’ of health workers and to raise a reported $6.7 billion for this and other projects to rebuild its economy may well be the first concerted action by an Indian state to remedy the expected fall in foreign remittances following the return of many expatriate workers.
The state announced that it plans to raise this sum through its infrastructure investment board. Kerala, a state that has been described as one with development indicators comparable to the first world, is a large beneficiary of inward remittances.
It received about one-fifth of the $80 billion sent home by Indian expatriates last year. While nurses from Kerala are already employed in many countries around the world, its expatriate community also includes workers in the Middle East, many of whom have returned in the wake of the coronavirus epidemic.
It is therefore both prescient and sensible for Kerala to prepare for the future and to show the way to other Indian states that are likely to be hit similarly.
While the virus has severely hit construction and infrastructure building activities around the world, it has in parallel increased the demand for healthcare professionals and underlined the need for even advanced economies to increase health coverage.
As the state’s finance minister, Thomas Isaac, said in a recent interview, “Countries have realised that lack of investment in public health system can, in a pandemic time, be totally debilitating to the national economy. There will be demand for Kerala nurses and paramedics all over the globe.”
While the initiative is unique and welcome, Kerala is by no means the largest exporter of expatriate workers in India.
According to data with the government, Uttar Pradesh may be sending nearly twice as many workers abroad as Kerala. Andhra Pradesh, Bihar and Tamil Nadu send nearly as many as Kerala while other significant manpower movements take place from Rajasthan, West Bengal and Punjab.
And yet, not surprisingly, it is Kerala that has taken the lead to plug a gap in inward remittances that is likely to hit all these states. The others may have been lulled into complacency because remittances may not show an immediate drop because, as Mr Isaac explained, returning workers uncertain about their future are coming home with all their savings.
Kerala has announced several initiatives to rebuild its economy, and these include improving technological infrastructure and offering loans as well as interest concessions to companies that wish to relocate to the state.
With strong development indicators, near total literacy and the country’s highest sex ratio, Kerala already has a head start. It is time other states took a leaf out of Kerala’s book and examined options to recast their economies. The Union Government too must appreciate the need for a concerted action plan to tackle this fallout of the epidemic.
After all remittances from Indian expatriates are significantly higher than the fickle FDI inflows which governments hanker after.