A new program introduced by India's Ministry of Overseas Indian Affairs aims to encourage the country's migrant workers in the Gulf to put aside savings for their inevitable return instead of sending all their earnings home to their families.
Five million Indians live and work in the Gulf on temporary employment or contract visas, mostly on construction sites, in hospitals and as household servants. Remittances by migrant workers to India totaled $64 billion in 2011, according to the World Bank, making India the leading receiver of remittances in the world, and Indians in the Gulf accounted for about 30 percent of that. But most of the money that they periodically send back is spent by their parents, wives and children; little gets saved.
"Gulf money has raised the standard of living for millions of families in India," said K.V. Shamsudeen, chairman of the Pravasi Bandhu Welfare Trust, an organization that helps troubled lower- and middle-income nonresident Indians. "But I always ask the workers: Can you maintain your family's new and improved lifestyle if you return to India? Their response is always no."
The new Indian government program, the Mahatma Gandhi Pravasi Suraksha Yojna, opened its first enrollment center in July in Kerala, the Indian state that is home to the largest number of Indians working in the Gulf. Its first overseas operations are expected to begin in the United Arab Emirates this month.
Social activists have long highlighted the urgent need for a pension or other financial plan that protects workers.
Sanjay Verma, consul general of India in Dubai, said: "Why has it taken so long is a difficult question to answer. There have been attempts in the past to introduce a few insurance policies specifically for the workers, but they didn't take off."
"For a worker to understand that giving up 1 rupee today is a wise investment for his future takes a lot of time," Mr. Verma added. "How do you generate a pension out of temporary work over three to five years?"
The program is open to workers in the Gulf aged 18 to 50 who have "Emigration Clearance Required" stamped on their passport. Holders of such passports are subject to additional checks when going to selected countries on a work visa.
"It's the government's way of protecting the worker - ensuring he or she is on a valid and legal contract and understands the contract," Mr. Verma said.
Workers who sign up for the program can benefit from a pension that would vary based on the amount of their savings and the time over which it had been built up; a return and resettlement savings benefit from UTI AMC, a public-sector financial institution; and a free life-insurance benefit from the ministry through the Life Insurance Corp. of India. In case of death by accident, the subscriber's family would receive 75,000 rupees, or $1,350, while a permanent partial disability from an accident would give the subscriber 37,500 rupees.
"The premiums are not very high, but it's too early to predict a reaction to the scheme," Mr. Verma said. "Naturally, a lot of communication and engagement with the work force must take place to make them understand the modalities."
"In time, if there's a higher demand and depending on the response," he said, "the premiums and numbers could change."
Women, representing 20 percent of all Indian migrant workers, who save 5,000 rupees under the plan can expect a contribution of 3,000 rupees from the ministry each year. Men would receive 2,000 rupees from the ministry. The ministry's contributions would continue up to five years as long as the individual is working in the Gulf.
"Any effort by the Indian government to look after the interests of this important group of people is always welcome," said Mr. Shamsudeen, who since setting up his social organization in 2001 has conducted dozens of financial planning and guidance seminars for unskilled nonresident Indians and their families.
"Our workers are barely literate," he said. "To expect financial literacy of them is like asking for the moon. They send money home and their families spend it without any accountability on wasteful and extravagant items - mobile phones, clothes, weddings, electronics and unnecessary food."
Realizing that the families were unaware of the sacrifices of their primary breadwinners in the Gulf, Mr. Shamsudeen has embarked on a series of what he calls "reverse seminars" - addressing workers' dependents in India.
"I talk to the families and explain that their men are working hard and long hours," he said. "They deny themselves a cup of tea so their children can enjoy their mobiles and Pepsis. The concept of saving does not exist, and a scheme is an important step toward cultivating the habit."
Commitments to family members back home put a heavy burden on migrant workers. Suresh Kumar, a 45-year-old from Kerala, arrived in the United Arab Emirates in 1984 to work as a cleaner for a monthly salary of 400 dirhams, or 6,000 rupees. Over 27 years in the Emirates, he learned basic tailoring skills, financed the education and weddings of his six sisters and paid his mother's medical bills, all while providing financial support for his wife and two children in Kerala.
Mr. Kumar also racked up debts of 61,000 dirhams after borrowing from illegal private lenders. Despairing of ever being able to repay the debt on a monthly salary of 2,000 dirhams, three months ago he decided to commit suicide.
"I was stopped by my roommate," he said, "who woke up when he heard me climb up the table and tie a scarf to the ceiling fan in our room. He helped me out by connecting me with Mr. Shamsudeen. My story was aired on radio and the community donated 18,000 dirhams to clear my debt. Others have also helped me and my outstanding loans are now 40,000 dirhams. I hope I can clear it, and I hope I can even save some money for my return."
Mr. Shamsudeen notes that saving money is a huge challenge. "The approach has to be multipronged: education, awareness, repaying and saving," he said. "It's not going to be easy, but it is necessary."