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With jobs abroad drying up, India’s remittance economy set to take a big hit


A draft bill to reduce the number of foreign workers in Kuwait has been deemed constitutional by the legal and legislative committee of the Gulf nation’s national assembly. Though the final legislation is yet to take shape, there is no escaping the fact that Kuwait wants to comprehensively cut down on the number of its foreign workers. This has serious implications for Indian workers in Kuwait who form the largest expatriate community in that country.

In fact, the draft bill proposes that the number of Indians be reduced to 15% of Kuwait’s 4.8 million population. This would mean the Indian presence in Kuwait reducing by 7-8 lakhs. That is certainly a huge blow as Kuwait is a top source of remittances for India. In 2018, India received close to $ 4.8 billion from Kuwait as remittances. But it’s not just Kuwait alone that is looking to reduce dependence on foreign workers. Other Gulf nations too are contemplating similar measures as oil prices slump and are unlikely to reach the highs previously seen. This means that the days of Gulf nations heavily subsidising their own citizens are over.

These countries now want to put their own people to work. And that means they have to cut down on foreign workers. But India’s remittance economy, which is considerably dependent on Gulf nations, will take a hit. Additionally, we would also need to accommodate the returning workers in the domestic job market. At a time when the economy is heading for a recession, this certainly won’t be easy and could exacerbate existing social pressures.

Read also: Kuwait’s bill on workers rings alarm bells in India

Even before Covid-19 struck, the Indian economy wasn’t doing well and the world was becoming more isolationist. Both these trends have been accentuated by the pandemic. The only way out is for the Indian government to jumpstart the economy through deep-rooted reforms. Some efforts have been made in terms of trying to free up labour and open up agriculture. But much more is needed. Otherwise, with jobs abroad drying up, India is looking at a massive unemployment and poverty crisis.



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