Vijayawada: Andhra Pradesh used to be one of the major contributors to inward foreign remittances for years, but the trend seems to be changing in recent years as many NRIs are disposing of their properties in the state, resulting in an increase in outward remittances.
Though outward remittances slowed down after the regime change in the state, the overall trend is on the rise.AP is one of the states with a significant number of NRIs after Kerala, Punjab, Maharashtra, and Gujarat. It has a history of receiving the highest foreign remittances from the USA. However, NRIs who moved to the USA in the late 90s are now disposing of their assets, both self-acquired and inherited from ancestors, after deciding to settle down in that country.
Many of those who migrated to the USA after the information technology (IT) boom were from the agricultural background and had an emotional attachment to their properties back home, especially those inherited from ancestors. However, their children, who were born and grew up in the USA, do not have the same kind of emotional attachment to lands or properties in India.
Another reason behind the disposal of assets by NRIs is that there is no one to look after their properties. In most cases, the parents’ generation has passed away or is not in a position to look after the properties.
Peddi Ramana, a resident of Dallas in the USA, came to India recently to liquidate six of his properties in and around Nuzividu and Vijayawada. He said neither he nor his children have any plans to return to India, which is why he does not want to leave any assets here without proper care.
The Land Titling Act proposed by the previous YSRCP govt also triggered fears among the NRIs with some of its provisions. According to bankers, there has been a sudden spurt in outward remittances by NRIs, especially after the introduction of the Land Titling Act.
The manager of a top private bank having a significant number of NRI accounts said outward remittances used to be very low before Covid-19, but there has been an increase in the trend post-pandemic, which further spiked after the Land Titling Act.
Another private bank manager also cited similar reasons for the increased number of outward remittances. Apprehensions about the Land Titling Act created a sense of fear among NRIs, which led to risk-averse investors starting to liquidate their properties, he said. Another reason that contributed to the increased trend is that the present generation is looking to invest more in liquid assets, he added.
Krishna Mohan V, a native of Gudivada and now a resident of Michigan, sold off his assets in Vijayawada. “We cannot expect multi-fold returns from real estate in AP. Though land prices have appreciated over a period of time, there is a mismatch between the growth prospects of the state and the future growth of land prices. Maybe this is the time for profit booking and moving on to the next investment,” he said.