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Low incomes, rising cost of living

By Vimala Vasan

ABU DHABI:, Many Indian expatriates in the UAE are seriously considering sending their families home following huge increases in rents and spiralling prices of essential commodities in the past few months.

Frustrated expatriates have voiced their grievances over the high cost of living through letters columns in local dailies, urging the authorities concerned to curb landlords from indiscriminately increasing rents and traders from raising prices.

Additional spending in parking fees and impending road tolls and increase in school fees and medical expenses are burning a hole in the pockets of low- and middle-income groups. Higher income groups are also feeling the heat as their capacities to save or invest money has dwindled, substantially. Salaries remaining stagnant for many years have compounded their woes.

For expatriates, both old and new, big savings, buying gold, building houses or investing in the stock market may soon remain a dream.

The Pravasi Bandhu Charitable Trust is conducting a study on the impact of the big increase in cost of living. K.V. Shamsudheen, chairman of the trust, told The Hindu that some Indian community school officials in the northern Emirates indicated the likelihood of many children leaving schools to go back to their country and continue studies once the summer vacation began in late June.

"We will be able to estimate the true impact [of increased cost of living] when the summer holidays begin. We are aware that many employees are considering shifting their families to their hometowns in India as they are unable to make both ends meet here," he said.

Social implications of such a trend will be grave because women will have to take care of children on their own with the men being separated from families.

In two recent studies, the Abu Dhabi Chamber of Commerce and Industry referred to the growing gap between income and expenditure for both nationals and expatriates, and highlighted the need to provide low-cost housing to the latter and encourage them to invest in the UAE so as to bring down increasing remittances to their home countries.

One study pointed out that in the past five years, growth in expenditure for national and expatriate families, in percentages, was 26 and 15, respectively. Despite the robust economic growth and high profits of companies, incomes of workers were low compared with skyrocketing prices of commodities and services, it said.

With this heavy burden, the emirates had become a difficult place to live for low- and middle-income categories, the study pointed out, adding that some families had been forced to seek assistance from banks and charitable organisations to meet expenses.

Another study referred to the huge sums sent out by expatriates as remittances to their home countries (Indians accounted for nearly 45 per cent of the 40 billion dirham remitted by 2.1 million expatriates last year), and called for measures to encourage expatriates to bring their families to the country and spend and invest in the local economy.

The UAE Government has, however, acted fast with the announcement last week of an increase in salaries for employees in the federal and local departments.

However, a vast majority of expatriates work in the private sector.

It is unlikely that their problems will be resolved unless companies decide to do likewise and announce increments, which, according to industry sources, has to be substantial to meet the inflated cost of living.

Ground realities

Online glitches continue to worry passengers keen on booking tickets on Air-India Express, a budget airline to be launched by Air-India on April 29. Travel agents here told the The Hindu that the delay in putting an online booking system in place and appointing travel agents could drive away many prospective passengers, who will look at other airline options as booking fever mounts for the coming peak summer season.

Though only a fortnight is left for the launch, the Air India management is yet to appoint a GSA or local agents. This has prevented the local online booking system from beginning operations.

The airline's officials here are hoping that the problems will be sorted out this week. "We cannot do much at this end till we get the green signal from the management," an official added.

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