Are NRIs being taken for a ride?

I find it strange when economists, builders, bankers and politicians behave as if NRIs are fools and can easily be taken for a ride.

What got me upset was that recently at a conference in Delhi, we had an economist saying how NRIs need to be taxed in India and that money needs to be used to help the poor. Helping the poor is good - but shouldn't we instead be taxing our politicians extra? I'm sure a little bit of tax wouldn't hurt them. Instead of putting taxes for NRIs, we need to reduce taxes even for resident Indians and ensure that our bureaucrats are taught how to spend money efficiently. Tax reduction is fact will increase the money the government earns in the longer run. Tax reduction will put more money in the hands of people, which they can use to invest and spend. This will create new employment and opportunities and thus reduce poverty. Charity doesn't reduce poverty - opportunities and investment do.

At a time in India tax rates were 98% - were those taxes helping the poor in any way? It just made a lot more people poorer. The best way to reduce poverty is to increase wealth.

NRIs are already made to pay heavy taxes in their respective countries or work/residence. In addition to this, if they are to also pay taxes back home in India, they will simply stop sending money back home. The problem with these economists is that they never think about the practical aspects of life. They are simply following theoretical knowledge printed in books. A hard working man leaves his home in search of work abroad, should he be punished even more for it? Have they forgotten that NRIs are amongst the people most faithful to India and regularly send money back home?

We should instead ensure that we stand up for them, when they are faced with discrimination, racism and security threats. Our government should threaten action against governments that are not stopping racism and discrimination. Look at what is happening in Australia. Our government is too soft on a lot of issues internationally - if we don't stand up for our rights, we are committing the biggest sin. In the Geeta we are taught, that the biggest sin is to tolerate injustice.

If NRIs are taxed in India, they will simply stop sending money back to India or use various creative methods available. Even if they were to invest in Indian equities, they could form a company abroad and route money through Mauritius (or any other Tax Haven) and make sure it is completely tax free.

Today in almost every area NRIs are being treated as fools. They are firstly getting much lower rates in an FD. For example a one year rupee FD gives them barely 3% p.a. - they might as well just keep their money in a savings bank account and earn more interest. When it comes to builders and property developers, they are always looking out for an NRI to trap and sell something even more overpriced than what they sell to a resident Indian. What is the protection available to innocent people who have invested in property and been cheated by the land mafia? Remember Khosla Ka Ghosla? Today not a single non-resident Indian will invest in property, because it is even more overpriced than property in London or New York. Just because I have Rs. 100 crores, it doesn't mean I will buy a dilapidated building overlooking slums for Rs. 2 crores. Irrespective of whether you are an NRI or resident Indian - nobody is a fool.

The great thing about us Indians is that no matter how difficult and challenging things are made for us, we always come up with ways to surpass the system. Today our fellow Indians are present across the globe, making the name of our nation proud. India is an excellent investment opportunity, all that our government needs to do is make it a little easier for NRIs to invest safely back home. They should be made to feel safe, comfortable and happy about being Indians. It would also be unfortunate that they miss investing in India, just because of a few old age economists or bureaucrats. We should ensure these people don't interfere in our lives and our dream of building a new prosperous, confident, healthy and happy India.

JAL(Japan Airlines) went bankrupt, Citi-Bank declared heavy losses, Bank of America declares losses, Obama puts pressure on banks. These are all signs that we are getting close to the start of some excellent buying opportunities.

 - Yogesh Chabria

The author dreams of making each and every Indian financially literate the Happionaire™ Way. His latest bestselling book, Happionaire's Cash The Crash helps investors make the most of now, while sharing little known insider secrets. You can get in touch with him at yogesh.chabria@moneycontrol.com

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