Kerala is working on buffers to counter any sudden fall in remittances or mass repatriation of its migrant workforce in the Gulf. The government claims to have a slew of measures on the drawing board since many Gulf-based employees are returning with oil prices still nowhere near where it was, and its cascading impact.
The State government’s department of NoRKA, the interface between it and Non-Resident Indians (NRIs), says it is strategising hard.
“We are in touch with our Ambassadors in the Gulf and have already had discussions with them in Bahrain and Qatar,” said Rani George, Secretary, NoRKA.
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Rating agency Crisil had on Sunday said that if oil prices remained weak over an extended period, economic activity in Gulf Cooperation Council (GCC) countries would come down sharply, as fiscal stress mounts.
“This can certainly impact GCC remittances to India,” Crisil stated in a report titled, ‘A gulf in remittances, but don’t fret yet.’
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But Ms. Geroge did not foresee any sharp spike in repatriation rates of Keralites in the immediate future. She pointed to the Saudization program since 2011, ‘Nitaqat’ in Saudi Arabia.
Though this program combined with a crackdown on visa irregularities had resulted in the departure of over 1.4 million migrant workers from that country since 2013, Kerala was not affected much because of the timely intervention of the government and its agencies,’’ she said.
In fact, the non-resident deposits in Kerala had increased from Rs.97,466.04 lakh in September 2014 to Rs. 1,21,619 lakh in September 2015. The government’s programs in association with the banks, which were introduced at the time of Nitaqat, were still on, she said.
Under these, repatriates are provided Rs.20 lakh a head for self-employment initiatives. “Now we are trying to revamp our skill upgradation programme, identifying skill requirements in Gulf countries. We are in touch with human resource mangers and employers in these countries,” Ms. George said.
More than half of India’s remittance income comes from GCC countries.
Saudi Arabia hosts the largest number of migrants in the Gulf region and that country is the second largest source of NRI remittances after the USA.
The Gulf lost some charm for India last fiscal, both as a destination for exports and a source of remittances, “but a hard look at the numbers suggests that the situation is not as bad as it appears,” the Crisil report said.
Oil prices have clawed back to US $ 50 a barrel from a low of around US $ 26 per barrel in February this year.
Price rise ruled out
However, any strong rise in oil prices is ruled out as OPEC countries are in disagreement over strategies to boost prices. Most experts believe that the worst of the collapse is over, but say it is very difficult for prices to go back to the US $ 100 a barrel mark.