A Crisis in Human Capital: Understanding the Indian Brain Drain
During the 1960s, way before the term “Globalization” gained currency, the “Brain-Drain” was the primary issue that plagued India. After the Indian-American Parag Agarwal was appointed as the new CEO of Twitter on November 29, 2021, the discourse surrounding the outward migration of skilled individuals from India to developed countries gained new momentum.
The phrase “Brain-Drain” developed during the 1960s to define the migration of British scientists to the United States of America. Now, the term categorizes the general migration of skilled and sophisticated labor from developing to developed nations. Multiple push and pull factors encourage a diaspora of this kind. As this trend is increasing worldwide, new governmental
measures must be taken to counteract the drain of resources in developing countries in the global south.
The appointment of Parag Agarwal to CEO of Twitter was only a catalyst to the already heated debate surrounding Indian CEOs of multinational conglomerates, such as Satya Nadella, Sundar Pichai, Shantanu Narayen, Arvind Krishna, Anjali Sood, Aman Pal Bhutani, and many others; raising the question of whether Indians should feel proud of these individuals representing a developing nation’s prowess in knowledge, technology, management, and entrepreneurship or if they should regard these accomplishments as a potentially devastating loss of human capital in their home country.
The converse of “Brain-Drain” is “Brain-Gain”: the phenomenon in which the global west has developed largely because of the work of influential individuals who immigrated to the west from countries like India. The first migratory wave of skilled and educated labor from India to developed nations started in the 1960s, in which capable and meritorious individuals - largely educated from subsidized public educational institutions - thought that the employment opportunities in India were not satisfactory for the level of educational and vocational capital they had. This belief caused a mass exodus of educated individuals and brought about a crisis in Indian human capital, which at the time was extremely crucial for the post-colonial country to thrive during the nascent stages of its development. This migratory pattern caused an irreparable loss in India’s growth potential, which continues to plague its development today.
However, the “Brain-Drain” did not end in the 1960’s: today, India is the biggest exporter of health care workers to Gulf Cooperation Council (GCC) countries and other European and English-speaking countries. As per the data procured by Organization for Economic Co-operation and Development (OECD), there was a staggering presence of 69,000 Indian doctors in the UK, USA, Canada, and Australia in the year 2017 alone. As of 2020, India provides the largest diaspora of highly skilled individuals in OECD countries, with over 3 million migrants who are beneficiaries of post-secondary education. During 2015-16, India was also ranked second in the list of the main origin countries for immigrants living in OECD countries.
Such figures are also corroborated with data from the Indian Ministry of Home Affairs (MHA), which believes that 881,254 Indians have renounced their citizenship since 2015. This means that, on average, 345 people have been leaving the country daily for the last seven years. According to the data available at the Indian Ministry of External Affairs (MEA), 13,383,718 Indians are currently living in foreign countries. Such staggering statistics show that India possesses a very high share of highly educated immigrants. This demographic would have been infinitely useful had their potential been utilized within the Indian economy.
Push and Pull Factors
Migrations of any kind or magnitude are encouraged by certain push and pull factors. Factors that push individuals out of their homes in search of newer areas are known as push factors of migration. On the other hand, conditions existing in areas that tend to attract migration are
known as pull factors. The factors which encourage the “Brain-Drain” out of India are multi-causal, often overlap each other, and act in unison to push skilled and educated talent out of the country. Cited below are a few of the most important push factors that pressure educated Indians to seek work in other countries.
A Crippled Education System - According to economist Shruti Rajagopalan, the primary reason behind the Indian “Brain-Drain” is “an education system designed for ‘selecting’ the best and the brightest in an economy that is still too controlled and cannot create opportunities for its best and brightest.” Education in India has always been an elitist institution: public educational institutions are scant in number, and the GDP expenditure on education is a mere 3%. All of these factors, coupled with the high tuition fees of private colleges, make the privileges and benefits of education available only to a select few.
Low Income and Unemployment - The next factor - which is a byproduct of the country’s crippling education system - is the rate of low-income earning individuals and national unemployment in India. According to an Employability Assessment Survey by Aspiring Minds, 95% of engineering graduates in India are unfit for any software development jobs. In addition, most of the big businesses within India are family businesses that do not easily allow outsiders to penetrate the highest echelons of management positions, which results in lower employment rates and opportunities. A report by the Center for Monitoring Indian Economy has also revealed that the unemployment levels are directly proportional to the education levels in India: as of December 2021, one in five college graduates are unemployed. In contrast, developing countries
rank much better in employability, especially in fields of healthcare and information technology. Fiscal reasons and monetary requirements remain the biggest reason encouraging the Indian diaspora.
Minimal Research Support - India spends about 0.7% of its GDP on research and development, so naturally, individuals interested in scholarly ambition with academic prowess and a penchant for research migrate toward European countries.
In addition to this, strict taxation policies and anti-corruption laws have forced individuals with high net worth to migrate out of India to look for better business opportunities in foreign lands. According to a study done by Morgan Stanley, around 2300 millionaires left India between 2014 and 2019. This obviously comes with a huge amount of revenue loss. Another study done by Global Wealth Migration Review has shown that around 2% of India’s billionaires shifted their capitals permanently abroad despite the crushing conditions of the COVID-19 pandemic.
The migration of high net-worth individuals away from their home country has deterring effects to its economy. Highly educated and rich individuals tend to migrate towards countries with optimal business opportunities and fantastic education facilities, and subsequently where they can find better standards of living, better pay scales, and infrastructure; which unfortunately ensures that their home country will continue to struggle economically and financially to compete with wealthier countries.
The Government’s Role: How to Move Forward
To reverse the brain drain, the Indian government needs to make better education accessible to a wider demographic, invest more in research and development, and frame taxation policies in such a way that encourages businesses to stay and prosper within India; all measures which will grow their economy, better their country, and retain Indian talent.
Certain efforts have already been made to achieve these ends with the Ramanujan Fellowship, The Ramalingaswami Fellowship, Innovation in Science Pursuit for Inspired Research, and the Vaishvik Bhartiya Vaigyanik (VAIBHAV): all of which aim to bring Indian scientists back to their home country. However, given the social and economic structure of India, the government also needs to promote policies to encourage migration within India from poorer areas to areas offering better opportunities along with prompts of return migration. It is only through the formulation of such a combination of long-term policies that the Indian government can expect to counter the impending crisis it faces in human capital.