Turning the tide on brain drain

Source: The post is based on an article “Turning the tide on brain drain” published in Business Standard on 29^th July 2023.

Syllabus: GS 2 – Indian Diaspora

Relevance: reasons behind Indian citizens migrating abroad

News: The article discusses the causes behind Indians going overseas and the actions required to retain them in India.

What are the key highlights of the data regarding people moving abroad?

Around 32 million Indians prefer to live in other countries. Around 18 million have gained citizenship abroad, while 14 million are non-resident Indians (NRIs).

Over half of every batch of Indian Institute of Technology (IIT) graduates end up overseas. Even large corporations are establishing themselves abroad.

What are the concerns with this migration?

The 32 million people, which is roughly 2.2 per cent of India’s population, represent a significant opportunity cost for the country.

Their remittances have contributed to a growth in the GDP of India. However, if they lived and worked here, they might have added several multiples of that to GDP.

There are also young people looking to move abroad every year, whose skills and earning capacity will be lost if the brain drain continues.

What are the reasons for migration?

Lack of Opportunity: There is a lack of opportunity in India for highly educated people, businesses, research and for professionals.

Weakness of Indian passport: Obtaining visas for First World countries is a challenging process for Indian citizens. Hence, there has been a rush for golden visas and for 10-year US visas as alternative options.

Moreover, Indian passports also leads to difficulties for Indian passport holders in accessing various countries.

Tax and License Regime: A lot of requirements need to be fulfilled before setting up a business in India. Similarly, managing tax filing and accounting are also challenging in India.

Further, contractual issues in India are known for their slow resolution, and cross-border transactions add to the complexities.

Must Read: What are the implications of Emigration of India’s brightest youth?

What measures can be adopted to control migration?

First, India currently has a low ratio of domestic investment in research, both from government budgets and private institutions

Therefore, there is a need to promote research institutions and high-tech businesses in the country to create opportunities for highly educated individuals in India. There is also a need for relaxing investment rules and providing tax breaks for R&D initiatives.

Second, simplifying tax processes and paperwork in India would benefit not only new entrepreneurs but also existing businesses already operating within India.