Indian expatriates hit hard as Gulf economies slip on free fall in crude prices

Indian expatriates hit hard as Gulf economies slip on free fall in crude prices

 | TNN | Jan 22, 2016, 04.01 AM IST
(Representative TOI illustration)(Representative TOI illustration)
CHENNAI: With most Gulf countries taking austerity measures or planning to impose tax on the income of expatriates, many Indians in those nations are sending their families back to India. Others have decided not to take their families with them.

Oman, in particular, which has released an austerity-driven budget, has made moves that are likely to affect the monthly expenses of expatriates.

Low oil prices have also hit the economies of the Gulf Cooperation Council (GCC) countries. Gulf economies, with the exception of Dubai, are almost fully dependent on petro income. The free fall in crude prices have led to job cuts and resulted in companies not granting increments. There are no new projects while several projects have been cancelled across the region.

GCC countries are now imposing taxes and have increased the cost of fuel locally. Water and electricity and other utility charges have also increased, making it tough for Indian expatriates. GCC countries six months ago imposed income tax on expatriates while the UAE is in the process of introducing value-added tax (VAT) and tax on remittances.

"A few companies have cancelled their projects. The only silver lining is Expo 2020 to be hosted in Dubai where industry hopes to sign major projects," Dubai-based KV Shamsudeen of the Pravasi Bandhu Welfare Trust said.

"Dubai, Qatar and Kuwait have projects worth $100 billion to complete," he said. "One of the main reasons families are returning to India is high rents and difficulty in getting admission for their children in schools. Though Dubai has eight new schools it is next to impossible to get a seat and the only alternative is to move back to India."