Saturday, 9 November 2013


A new generation will not suppress the urge to leave as populist politicians and global headwinds conspire to turn nation's growth story into horror story.

Next year, when India will hold its 16th parliamentary elections, the international commentariat will once again reflexively go ga-ga over the world's largest democracy while domestic TV talking heads will blather on about the likely political composition of the next central government in New Delhi.

But far from the glare of the election-obsessed media, a small army of mostly young Indians will be single-mindedly preparing to vote with their passports.

They have seen the future, and it doesn't work, at least for them.

There is no statistical evidence to indicate that droves of educated Indians are suddenly trying to emigrate. Nor are there reports of rickety migrant-filled boats leaving Indian shores for Christmas Island or Lampedusa.

Instead, a fairly recent trend - of increasing numbers of Indian students going to the West in pursuit of higher studies that they see as a stepping stone to a stable career - is likely to continue, in tandem with the sizeable migration as usual of executives and labourers to the Gulf and Southeast Asia.

Even before the Indian economy went into its latest slump, the jump in the number of students going overseas to study in the nine-year period between 2000 and 2009 was a stunning 256 percent, according to a report published last year by the Indian Institute of Management (IIM), Bangalore.

For the academic year 2010-2011, surveys conducted by two international institutes estimated the number of outbound students to be in the range of 200,000.

Public dissatisfaction

Experts believe this drain of talent and skill is both a public no-confidence vote against India's political and bureaucratic classes, and a barometer of dissatisfaction with the general direction of the country.

Arun Maira, a former India chairman of Boston Consulting Group and a current member of India's Planning Commission, put it this way in a recent oped in the Indian business newspaper Mint: "No doubt India has progressed in the last 20 years. ... But the pace of progress is too slow for its citizens' aspirations. And it is slower than other countries."

Curiously, until just a couple of years ago "India's growth story" was the catchphrase of leading analysts and investment banks, who thought the historically impoverished country had finally turned the corner.

Along with Brazil, Russia, China and South Africa, India suddenly found itself in a grouping of developing or newly industrialised countries called BRICS as well as in the principal forum of the world's 20 major economies, G20, for consultations on the international financial system.

The numbers coming out of India then appeared to validate the honours.

As the CIA World Factbook notes, the Indian economy recovered strongly in 2010 from the global financial crisis thanks to robust domestic demand, with GDP growth - the broadest measure of economic expansion - exceeding eight percent year-on-year in real terms.

For the first time in perhaps centuries, members of the Indian diaspora started to see their country of origin as a potential land of opportunities rather than as a place to escape from.

Concurrently, the country's large young population began to be viewed as a "demographic dividend" by foreign companies hungry for new markets and cheap labour.

Double blow

India's economic growth began to lose steam, however, in 2011 amid reduced government spending and declining investment as companies lost faith in the Congress Party-led central government's commitment to continued economic liberalisation.

Since then, the government's fuel-subsidy bill has soared further on account of high international oil prices, delivering a double blow of large fiscal and current account deficits.

Indian politicians have not helped matters by greatly expanding welfare spending since 2004, pumping more than $70bn into schemes aimed at lifting rural incomes without spelling out where the money will come from.

For an expanding middle class, the impact of the government's economic mismanagement is being felt in a host of direct and indirect ways - higher inflation, job cutbacks, salary stagnation and costlier foreign education and vacations.

As for the "demographic dividend", Ashish Bose, who pioneered the study of population in India, believes that the number of the young, far from providing a dividend, will be a demographic nightmare.

"You cannot have a dividend without investment, either in cash or kind," the 82-year-old demographer told India's Down to Earth magazine in an interview last May.

"It doesn't follow that just because you have the numbers, there will be an automatic dividend. There is already so much unemployment. ... [The jobless young] will become more violent."

Two citizen categories

As in the past, the roots of the current population flow out of India are broadly economic in nature, but there can be no glossing over the popular perception that the chances for middle-class youth of getting a good college education and landing a well-paying job in their home country are dwindling fast.

If debates in the Indian media are any guide, there is a growing feeling, fairly or not, among Indian elites that there are really two categories of citizens now, one of which receives all manner of doles and favours from recklessly profligate governments, while the other provides the revenue to pay for the extravagance yet has to compete in the face of overwhelming odds for every sliver of opportunity.

Among  the disaffected segments of Indian society, those that belong literally in the general category - that is, who do not qualify for extensive caste-based quotas for entry to educational institutions and jobs in government organisations - have good reason to be the most embittered of all.

A  much sought-after item - a seat in a heavily subsidised elite technology institute or university - is now practically beyond the reach of the general category thanks to fierce competition for the limited number of available seats in proportion to the national population.

To get around this problem, those Indians with the means to send their children to universities in the US, UK, Australia and Germany among other countries have begun to do so, with business, engineering and computer science as the subjects of choice.

But foreign degrees do not come cheap.

A study conducted by ASSOCHAM, an Indian business-lobby group, says there is a huge cost advantage for students studying in premier institutes in India compared with those who enroll, willingly or due to lack of choice, at foreign universities.

While an undergraduate student of an Indian Institute of Technology (IIT) has to pay an average fee of $150 per month, the fee paid by an Indian student studying abroad per month is roughly between $1,500 and $4,000.

Heavy financial burdens

Even before the recent sharp depreciation of the Indian rupee, going to a foreign university meant taking on heavy financial burdens and debts, the IIM report on outbound students found, while the ASSOCHAM study estimates the consequent yearly drain on India's already hard-pressed foreign-exchange reserves to be well over $10bn.

Not surprisingly, most of the students who go overseas for undergraduate and postgraduate education try to pay off their loans by staying back in the host country with its superior work opportunities and relatively attractive pay packages.

"Student migration is often the gateway for permanent stay in the country," according to a 2009 paper by Daniel Naujoks titled Emigration, Immigration and Diaspora Relations in India.

Anecdotal evidence shows that English-speaking, qualified Indians, once exposed to global professional standards and a better quality of life and facilities, begin to see the idea of returning home to take up a job only as a last resort.

These days, for those not brilliant or lucky enough to get into India's top universities and engineering institutes, the only alternative to going abroad for higher studies is to obtain admission to second-tier government colleges or private universities.

But as Indians know only too well, middling government colleges - with their decrepit facilities, poor teaching quality and outdated curricula - are a conspicuous failure when it comes to imparting education or job placement.

The private universities charge much steeper fees and conduct ad campaigns touting well-equipped labs, comfortable accommodation and guaranteed recruitment. But beneath the gloss and spin, things are more like gloom and doom.

An ASSOCHAM paper on business schools and engineering colleges reveals that between 2009 and 2012, campus recruitments plunged by 40 percent, making them unattractive to students.

The study says more than 180 business schools shut shop in 2012 in the major cities while another 160 were struggling for survival.

As things stand, millions of middle-class Indians cutting across religious, caste and social boundaries have no lack of incentives to move out of their country, whether as students, migrant workers or legal emigrants.

As long as they do not see drastic reforms in government institutions, improvements in public administration, a revolution in the education system and huge investments in infrastructure, they will not set much store by election-year promises of their politicians, experts say.

Aspiring for more

Even if a new government in New Delhi were to launch a sweeping administrative and economic overhaul, in a country of India's diversity and population size its impact would probably be too little, too late for the largely young and mobile present generation.

As such, the country's migration imperatives were laid out starkly in a report prepared in 2008 for the Transatlantic Council on Migration.

"India will see substantial numbers reach working age for the coming decade or two," two Brown University scholars who wrote the report said.

"Therefore a larger pool of workers will be looking for jobs in India, and those workers could become international migrants depending on the state of both the Indian and world economies."

Indeed, demographers say that the pressures of a growing middle class and persistent poverty will have to be absorbed to some extent by higher rates of internal migration and international migration, bearing in mind that India is projected to become the most populous country by the middle of this century.

To be sure, none of these detracts from India's fascinating turnaround from a source of indentured labour for sugar and rubber plantations in far-flung colonies, to the world's information-technology powerhouse.

Still, as Maira, the Indian Planning Commission member, says in his opinion piece, "Young Indians aspire for more. They want an even better life."