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Pravasi and Foreign Remittance To Kerala

Every facets of life in Kerala, economic, social, demographic, political and even religious are influenced by migration in one way or another. At the state level, there are about 3.75 million migrants in Kerala. 1970s proved to be an important watermark in the history of migration from Kerala. Prior to that, though there were international emigrations to South East Asian countries like Ceylon, Berma, Malaya, Singapore etc., large scale emigration from the state began only in the 1970s. Arab countries of the Middle East form the chief destination for about 95 percent of the emigrants from Kerala. Of this, Saudi Arabia alone account for about 40 percent of the Malayali emigrants. Outside the Arab world, U.S.A. followed by the European countries like England, Germany and others are the principle destinations, accounting for about 2 percent of emigrants from Kerala.

The principal places of origin of emigrants in Kerala are the Malappuram Trissure area. These are followed by Thiruvananthapuram, Palakkad,Kozhikode, kollam, Pathanamthitta, Ernakulam etc. The hilly districts of Wayanad and Idukki account for only small number of emigrants.

Hike in the price of oil in 1973 and consequent rise in the revenue generated a favorable climate for industrialization and social change in the Gulf (Middle East) countries. As a result, there experienced a huge demand for the services of foreign workers. Hence, a large number of workers began to migrate to the Middle East, especially from India. Migration which started with a few thousands during the mid 1970s, assumed huge proportions during the 1980s and 1990s.

At the turn of the millennium, the total stock of the Indian migrants was estimated at about 2.8 million. Of this, migrants from Kerala was over 1.4 million. During the period, Kerala got about 6000 crores from the Gulf as worker’s remittances. This migration and the flow of migrant remittances had created unprecedented change in the Kerala economy since 1970s.

Important Aspects of Migration

Emigration is a costly affair. Money is required to buy tickets, for visa fees, and for agents commission.

There are two distinct phases in the historical trend in the migration experience of Kerala. The first phase of migration started during the 1940s, when Kerala became closely integrated with the rest of India. It was in the context of the second world war and the Indian independence. Till then, Kerala was a net-in-migration state. That is, more persons from the neighboring states came to Kerala than the number of Keralites moved to these states. But after the integration, Kerala became a net-out-migration state. The number of Keralites moving to Madras, Bombay, Calcutta, Delhi and the like metropolitan cities exceeded the number of persons coming to Kerala from other states. The second phase began during the 1970s. During this decade, associated with the oil boom in the Gulf countries, the number of international emigrants from Kerala phenomenally increased.

Factors Responsible for Migration from Kerala:

An important motive of migration is the improvement of economic conditions through occupational mobility. Migration is a result of the operation of negative factors or push factors at the place of its origin and the pull factors or positive factors at destinations. The chief factor contributed for the large scale migration from Kerala may be pointed out as the weaknesses in the Kerala Model of Development. A vibrant social sector coexisting with a stagnant production sector is the complementary legacy of the Kerala Model of Development. Consequent to the rapid decline of mortality rate, there was a demographic shift in Kerala. As a natural corollary to this, developed the problems of large scale unemployment of the youth and low wages. Further there was an agricultural stagnation in the Kerala economy caused by the wage hikes and other agrarian reforms during the 1960s.

The grim side of the matter is that, structural reforms in the agrarian sector were not followed by the programmes like agricultural mechanization. All attempts at this direction were blocked by the trade union militancy. In the absence of the modernization of the sector, there was a stagnancy in the agricultural sector in general and in rice and coconut cultivation in particular. A vary high proportion of the migrants from the state belonged to the coastal and middle lands of the state, where the rice and coconut are the main agricultural crop. The accelerated development in education also can be considered as a pushing factor for migration. With the declining prospects of agriculture as a profitable venture, people began to consider education of children as the most meaningful investment. This resulted in an unprecedented expansion of the education sector in the state. Consequently, there developed a huge gap between the supply of educated persons and the availability of employment opportunities in the state. It became necessary for the educated of the Kerala youth to seek employment in the fast developing metropolitan centers elsewhere in the world. The failure of the state institutions to expand employment opportunities in the secondary and tertiary sectors also served as a powerful factor contributing to the large scale migration from the state.

The growing economic opportunities in the industrial cities of India after independence and in the Gulf countries consequent to the oil boom of 1970s served as the positive pull factors that facilitated migration from Kerala.

Impacts of Migration:

Socio-economic and demographic factors lead to emigration and out-migration. Emigration and out-migration in turn would lead to remittances. Remittances would cause social and economic changes. These changes would further become factors promoting migration. One of the major impact of migration on Kerala economy is the cash remittances made by the emigrants into their households. Workers’ remittances from the Middle East to Kerala presents a phenomenal increase over the years. It rose from rs. 824 cror in 1980 to rs. 1310 cror in 1990 and to over 5857 crore in 1994. At the turn of the millennium, remittances accounted for about 27 % of the state domestic product of Kerala.

The annual remittances received by the Kerala households were 2.55 times higher than what the Kerala government received from the central government as budgetary support. Besides cash, the households receive several items in kind, clothing, ornaments and jewelry, electric and electronic gadgets etc.

Remittances per emigrants vary according to educational levels. The remittances are mainly spent on household consumption, educational purposes, debt repayment, construction and repairing of buildings and bank deposits. Considerable improvements can be noticed in the living standards of the families of the emigrants.

Conspicuous consumption is the another major impact of emigration. Migration exercise a positive influence upon the ownership of the consumer durables. One of the important avenues in which the remittances have been used is the construction of large mansions. These mansions spread across the rural landscape become an environmental concern. It has been observed that, the size and quality of houses built by the migrants have vary little relation to the needs of their families as measured by the number of members in them. Further, the environmental consequences of using large quantities of cement and concrete in these constructions are enormous. Another major cultural impact of emigration is the unprecedented increase in the use of automobiles.

One of the important public policy issue regarding emigration is how to make use of the growing NRI deposits in the banks of Kerala for the social purposes. The government has been attempting to mobilize these funds for the industrial development of the state. Successful models like the Nedumbassery International Airport has been materialized by the NRI funds. Given the work culture, trade union militancy and political intervention prevailing in Kerala, there has been certain aversion among the NRIs to confidently invest their money in the development projects of the state. However, development projects in the social sector like education have good chances of absorbing the NRI capital. The development of IT is another potential sector where collaborative ventures can be built up with the NRIs.



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