The country is setting up an emergency social security system for the homeward expatriate workers who lost their jobs in the aftermath of economic slowdown.

Prime Minister, Dr. Manmohan Singh, said that the Congress party-led government is committed to protecting the interests of this group and will be taking up the issue on top priority.

The latest crisis to affect the expat workforce is the Dubai credit debacle. It is estimated that there are 4.5 million Indians working in Gulf countries. Despite assurances that the crisis will not cast shadow on the Indian workforce, the recent developments reveal a different story.

India, along with China and Mexico, tops the list of world countries receiving maximum remittances from its population abroad. Remittances are most important for the economies of developing countries. According to the World Bank estimates, every dollar of remittance is equivalent to three dollars in real to the economy.

India’s remittance for the last fiscal year totaled a whopping $50 billion. The major source of India’s remittance is North America. However, the last few years saw the spurt of demand for labor in oil-rich Middle-eastern countries, which shifted the balance in their favor.

The recession has affected both skilled and semi-skilled workers abroad. Dr. Singh said that a ‘return and resettlement fund’ would be set up to provide social security net for the returning workers.

Indian Community Welfare Fund is already in place in 18 countries to lend emergency support to the Indian workers. The government is also negotiating social security agreements with countries having large Indian emigrant population. While agreements are already in force with Switzerland, the Netherlands and Luxembourg, labor agreements are being negotiated with Bahrain, Malaysia and Qatar.