CHAPTER 10

INTRODUCTION OF BRAIN DRAIN

Brain drain, or human capital flight, is a buzzword that describes the departure or
emigration of individuals with technical skills or knowledge from organizations, industries,
or geographical regions. Brain drain is common among developing nations, such as the
former colonies of Africa, the island nations of the Caribbean and particularly in centralized
economies such as former East Germany and the Soviet Union. Recently, it's been
documented that China has been leading the world in Brain Drain.
ORIGINS AND USES
The term brain drain was coined by the Royal Society to describe the emigration of
"scientists and technologists" to North America from post-war Europe. Another source
indicates that this term was first used in the United Kingdom to describe the influx of Indian
scientists and engineers. The converse phenomenon is "brain gain", which occurs when there
is a large-scale immigration of technically qualified persons. There are also relevant phrases
called "brain circulation" and "brain waste".
Although the term originally referred to technology workers leaving a nation, the meaning
has broadened into: "the departure of educated or professional people from one country,
economic sector, or field for another, usually for better pay or living conditions". Brain drain
is usually regarded as an economic cost, since emigrants usually take with them the fraction
of value of their training sponsored by the government or other organizations. It is a parallel
to capital flight, which refers to the same movement of financial capital. Brain drain is often
associated with deskilling of the arriving immigrants, while their country of emigration
experiences the draining of skilled individuals.
Brain drain may also refer to a situation wherein an individual fails to complete any given
task as a result of a nervous breakdown.
The real reason for Indias brain drain they always come across reports of how much talented
Indians are and are conquering the world in the field of technology & business. There are several
reports suggesting that Indians dominate the technology industry of USA.
But why are most of those Indians not in India but in US/UK? If we go a little more in depth
to analyse this issue, we will begin to notice that the top Indian professionals & entrepreneurs
today in US had actually left India during 1970s & 80s after obtaining their degrees in India.
So, why did we have such a severe brain drain in 1970s and 80s?
One common answer we get is that India did not have the right opportunities for their
specialization. Maybe true for technical PhD holders who need employment from research
institutes which might not have been prevalent in India. But what about entrepreneurs? They
had a market of 0.7 billion people, something that nobody would like to ignore. Instead of
going to a foreign land and toiling hard to become entrepreneurs, why did they not remain in
India and do the same here? After all, India being a developing nation could have provided
them a chance to experiment as well as capture market share.
It is easy to say that they were greedy, did not care for our country and flee to the US for
greener pastures. But the real reason lies in the political & economic system.
This snapshot of the 1974 budget might give us some hints. During Indira Gandhis rule in
1970s, income tax was at an all-time high with the top slab having a tax rate of 97.75% !!
If you were an entrepreneur and wanted to set up a business (obviously you want to make lots
of money), would you be fine with doing business in such an economic condition? After a
certain slab, for every profit of Rs 100 you made, you were supposed to part away 98 rs to
govt and keep only Rs 2 for yourself. Would there be any incentive for you to work hard after
you reach a certain profit level since anything you earn after that will not come to you
anyway.
On top of the 97.75% tax, there were several more taxes like wealth tax, inheritance tax etc
which when added up would exceed 100%!! It means after a certain slab, if you were making
Rs 100, you were supposed to pay around Rs 103 in the form of tax!! Yes. It sounds funny
but it was true. Entrepreneurs & businessmen who were making more profits were being
penalized (in the form of exorbitant taxes) due to such policies.
Top businessmen like JRD Tata were actually selling a part of their wealth because for every
Rs 100 they earned, they had to pay Rs 105 in the form of tax. (So, for every Rs 100 earned,
they had to sell their existing assets worth Rs 5, add it to the Rs 100 earned and pay this Rs
105 as tax to the Govt).
f such powerful & respected businessmen like JRD Tata, Aditya Birla & Narayana Murthy
were being penalized with such unreasonable taxes, tortured due to harsh bureaucracy and
frustrated, imagine the plight of a normal entrepreneur. Wasnt it much simpler to hire a taxi
to the airport and get out of the country?
We had a rapidly growing population and millions of engineers graduating out every year but
no jobs were being generated because entrepreneurs had either left the country to setup their
business abroad or were becoming stale here due to the above mentioned reasons. With jobs
not matching the growing population, our graduates had no choice but to look for greener
pastures where countries like US & UK were welcoming them with open arms.
We had entrepreneurs and professionals but the policies did not allow them to work here. Our
talented brains & entrepreneurs did not leave our country, leading to brain drain. Our policies
pushed them out. It drained them out!!












CHAPTER 11
CLASSIFICATION OF BRAIN DRAIN
Brain drain may have the following types:
a) Brain over flow;
b) Brain expert;
c) Brain exchange; and
1. BRAIN OVER FLOW
Due to the over production or low rate of utilization of brain, some of the brains may remain
wholly unabsorbed/ surplus because of effective demand/excess supply at home, such brain
spill over and get absorbed in a foreign market. Brain migration of this type is called brain
overflow. Baldwin (1970) mainly depends on this type of brain migration and it is also
implicit in the analysis of Internationalist model. In many LDCs, unplanned and
comparatively cheap education added up with unemployment problems has produced a lot of
unemployed skilled labour. For instance, in January, 1965, there were 75,000 unemployed
engineers in India. India every year produces many more economists and statisticians than
she could provide with job.
2. BRAIN EXPERT
Brain migration may take the form of brain export by the sending country. The brain
exporting country receives in exchange for brain, remittances continuously over a number of
years. The payment may be spread over a number of years in the form of remittance of tax, it
may be a once-for ever lump sum exit tax.
A consolidated price for the export of the commodity brain power may also be realized from
the importing country but the computational method that can be applied to price fixation of
brain has obvious limitation. Market price of brain power does not very often reflect its
public cost. In the case of brain export, the exchange price must be equal to the public and
private cost of brain. Since the outgoing human capital from, LDCS mostly received only the
private cost, and not the social cost, such as an outflow cannot be considered to constitute
brain export. However it cannot be denied that it is very difficult to calculate the social cost;
and shadow price keeps on changing along with the time horizon. If the rate of return is
sufficient to cover the domestic opportunity cost of the transferred brain, it may be looked
upon as a case of brain export.
3. BRAIN EXCHANGE
Brain migration may be in form of exchange of scholars, researchers and students between
LDCs and DCs/ between LDCs themselves for the purpose of mutual benefits in terms of
knowledge, expertise and training. Such type of brain migration can more appropriately be
called brain exchange. Brain exchange is temporary phenomenon where brain loss is
compensated by corresponding brain gain.




The main reasons for Brain Drain are:-
Unemployment
Immigration rules
Colonial links
Financial incentives and material benefits
Pursuit of higher education
Improvement of working conditions and facilities
Avoidance of excessive bureaucratic procedures
Compensation for the mismatch between Indian education and employment.










CHAPTER 12
CAUSES OF BRAIN DRAIN IN INDIA
There are various reasons for the brai n drain i n India. The reasons
usuall y include two aspect s whi ch respectivel y come from countri es and
indivi duals. In t erms of countri es, t he reasons may be soci al environment (in
source count ri es: l ack of opportuniti es, politi cal inst abilit y, economi c
depressi on, healt h ri sks, et c. ; i n host countries: ri ch opportunities, politi cal
stabilit y and freedom, developed economy, bett er li ving conditions, et c. ). In
terms of i ndividual reasons, there are famil y i nfl uence, and personal
preference: preference for exploring, ambition for an improved career, et c.
Keepi ng all these i n mind we can identify some causes for the brain drai n in
Indi a.
Higher Education :

Hi gher educati on in Indi a evolved consi derabl y aft er independence in
terms of the number of universiti es as wel l as in t erms of access to hi gher
education. Nowadays, the number of uni versiti es in India has grown some 35
times comparing to 500 coll eges and 20 universiti es before independence
whi ch are enrolli ng more than 11 milli on students, more than 10 times before
independence. Before independence education was limit ed and eliti st: the
current system is though more open wit h from 30- 40% of enrolment s from
comi ng from the l ower cast es, and wit h women representi ng some 35% of the
total number of students. The impressi ve increase in hi gher education has
rai sed some questions over the adequacy of st udi es, resources, institut ional
qualit y and st andards. Students moving t o the abroad is keep increasi ng. The
most preferred educational destinati ons are t he U. S. and U. K. In t he year
2006, of the 1, 23, 000 st udyi ng outsi de India, 76, 000 have chosen USA
(94, 563 in 2007-2008, 83, 833 in 2006-2007) as a count ry of their choi ce
foll owed by UK, Canada and Aust rali a. Most popul ar forei gn universiti es are
Universit y of Southern Californi a, New York Universit y, Col umbi a
Universit y, Universi t y of Ill inoi s at Urbana-Champai gn, Purdue Uni versit y,
Indi ana, Uni versit y of Mi chi gan, Ann Arbor, Uni versit y of Cali forni a, Los
Angel es, Uni versi t y of Texas, Austin, Harvard Universit y, Boston Universit y,
Universit y of Pennsylvania.
Employment: -
Indi a has skill ed and semi -ski lled, empl oyed and unemployed human
resource. Low sal aries and i neffi cient working condi tions can be the first
motive that tri ggers the movement to the count ri es wi t h bett er living
standards and faci lit ies. There is huge difference in t erms of sal ary in all
three groups of countri es namel y developed, developing and underdevel oped.
To demonstrat e, Ski lled workers aim to get pl easing sal ari es in return for
thei r l abour but t he working conditions i n thei r homeland don' t ful fill thei r
wishes. Therefore, t hose workers prefer to move anot her country in order t o
have bett er li ving conditi ons with hi gh sal aries. Empl oyment is one of the
strong reason for brain drain i n India.
Lack of opportunities:

In devel oped countries, researchers are provided with funds and
necessary equi pment to carry out study, whi ch can be anot her moti ve that
att racts those deprived of t hese opportuniti es. Most sci enti sts i n
underdeveloped countri es, do not possess laboratory facil ities and researchers
cannot get suffi ci ent funds. Therefore, when devel oped count ries offer these
facili ties, researchers and sci ent ists naturall y prefer to mi grat e to t hese
countries. The i nt ernational izati on of knowledge creati on and t he rapid
expansion of R&D acti viti es determi ned the diversi ficati on of receivi ng
countries for professionals and skill ed workers from India. Traditional
mi grati on st reams of hi ghl y-skill ed Indi an were di rected toward the Unit ed
Stat es and the UK. In t he 2000s, new non-English-speaki ng desti nations
emerged in Europe such as It al y, France, Germany and other European
countries. The number of skill ed Indi an mi grants movi ng to Australi a,
Canada, and New Zeal and al so i ncreased.

Favorable migration policies: -
Increasi ng economic interdependence among nati ons, growing demand for
skill ed l abour i n the knowledge economy not to menti on demographi c trends
are all st rengt hening the positi on of Indi a as a major suppli er of young,
educat ed and quali fied manpower for t he EU. Owing t o i ts demographi c
profil e and it s Engli sh-speaking popul ati on, Indi a, with its l arge reserves of
hi ghl y-skill ed workers, has emerged as one of the most promi nent count ry to
fill the suppl y gaps i n the l abour -defi ci ent economies of the developed worl d.
Taking into account EU economi c objectives coupled wi th demographic and
ageing effects, Member St at es have put in pl ace sel ect ive i mmi gration
poli cies aimed at attract ing hi ghl y-skil led professional s and t erti ary-l evel
internati onal student s from South Asia. In order to facil itat e labour mobilit y,
some EU count ri es signed l abour -mobil it y partnerships with Indi a. According
to the Mini stry of Overseas Indi an Affai rs, t his kind of agreement s was
si gned with Denmark, and negoti ations are ongoi ng with other European
countries, EU and non EU, including Poland, the Czech Republi c, Norway,
Switzerl and and Hungary, Sweden and France. There are so many causes of
the brai n drain in Indi a. Fi rst of all, t here is the unemployment problem.
Even a tal ented person cannot get j ob. India i s lacki ng i n faci lities for hi gher
research work. The top appointments are quit e few in Indi a. Thus the tal ent ed
experts like t o seek new past ures abroad.
















CHAPTER 13
BRAIN DRAIN IN INDIAFAVORABLE OR
UNFAVORABLE?
A brain drain is a large emigration of individuals with the Knowledge or Technical skills, usually due to
conflict, political instability, lack of opportunity, or health risks. A brain drain is generally regarded as an
economic cost, because emigrants usually take with them the fraction of value of their teaching sponsored by
government. Do you believe brain drain, regularly known as a main problem in our country is essentially a
bad thing? I dont think so. In reality it is a big gift that capable minds are able to depart the country and track
their goals and dreams elsewhere. At the first glimpse, it seems like a huge loss. A significant number of young
people is parting the country. It looks like the state is losing a lot of knowledgeable and educated workforce
.However, what will happen if they seal the borders and detain all this talent inside the nation? Would they be
able to grow and be as creative as they would like to? Would they cause a technological revolution or will they
join the queue of unemployed people as well as produce more problems for our already worried society? The
biggest benefit of brain drain is that all those individual brains will get the opportunity to nurture in another
atmosphere where they get more support as well as have more freedom to boom and this is why they leave.
From a universal point of view, it will help talents develop and not be shattered. Here is a plain example, a very
intelligent friend of mine got a medal in the International Physics Olympics as well as entered the university
with no concourse. He graduated with most excellent marks, passed the Masters Entrance exam however was
failed for some silly reason. For some time he unsuccessfully tried to get around the difficulty, but at the end he
gave up and determined to study his masters out of the country. Now he is a PhD as well as lives happily and
works in the States. Would someone else in his condition have done something else? I think no .Furthermore,
the knowledge that those young brilliant people gain overseas will be very helpful if they choose in a later
phase to go back as well as settle down or engage in their country. The fact that young cultured people leave
the country in the present situation is not only good for themselves however is also good for the world.
However on the other side, Brain drain is a severe loss due to the flow of the competent and effective sector
of the country particularly oil producing states which are now in terrible need for trained and highly skilled
employees. Brain drain influences all level of education in the world which suffers illiteracy estimation at 70
million people. The economy can also be affected due to expenditure on study whether state funded or
privately. The migration even broadens the gap between the rich and poor countries. Brain drain is
advantageous to the beneficiary countries as well as loss to countries of origin, because it deprives these
countries from the innovations of their subjects. Such countries as a result have become culturally and
technologically dependent on the West. An answer to this would be to encourage entrepreneurs to
produce employment. The Government is supposed to give concessions in tax as well as decrease the hassles
concerned in setting up an industry. In this way we could make Indias workforce one of its major assets.







CHAPTER 14
ADVANTAGES AND DISADVANTAGES OF MIGRATION
OF SKILLED INDIANS TO ABROAD (BRAIN DRAIN)
The migration of skilled individuals to other nations is referred as the brain drain or the human capital flight.
This migration of talented individuals may be due to conflicts, lack of opportunity, or health hazards where
they are living.
In India, brain drain is more because educated individuals are emigrating for higher wages and better
opportunities. It has been in our consciousness since 30 years and many bright youngsters have emigrated
mainly to US from early 1960s onwards including a large fraction of the graduating class at IITs in India.
ADVANTAGES
The money the emigrants have sent back home has helped in alleviating poverty in their homes.
It has resulted in less child labor, greater child schooling, more hours worked in self-employment and a higher
rate of people starting capital intensive enterprises.
The money remittances have also reduced the level and severity of poverty.
Moreover, the money migrants sent back are spent more in investments such as education, health and housing,
rather than on food and other goods.
DISADVANTAGES
Due to the influence of brain drain, the investment in higher education is lost as the highly educated person
leaves India and becomes an asset to other country.
Also, whatever social capital the individual has been a part of is reduced by his or her departure.
With all the college graduates leaving their homelands, it raises the question as to whether their skills are being
put to good use in the destination country.
The chances of Brain Waste are possible. I
n a similar way, there is a shortage of skilled and competent people in India.
A tremendous increase in wages of high-skill labour can be seen now in India.
The emigration has also created innumerous problems in the public sector.












CHAPTER 15
INDIA TAKES STEPS TO PREVENT 'BRAIN
DRAIN'
Indias new science policy aims to position the nation among the top five global scientific powers by 2020.
This cannot be achieved without qualified academics, researchers, and scientists, yet India has to contend with
large numbers of postgraduate students leaving to complete Ph.D.'s or postdocs a majority to the U.S. and
staying away to pursue a career.
Now the government and industry, along with Indias elite universities and technical institutions, have united
to implement a series of measures to stem the tide while also encouraging large numbers of researchers to
return home.
Indias problem starts with the already small pool of students who choose to do a Ph.D. Between 1991 and
2001, the number of doctorates awarded increased by only 20 percent compared to an 85 percent jump in
China.
Today, no more than 1 percent of students with undergraduate degrees opt for doctoral studies and the
substantial number who do prefer to go abroad. India produces only up to 125 Ph.D.'s in computer engineering
a year, despite nearly 1.7 million engineering students graduating each year.
Pankaj Jalote, director of the Indraprastha Institute of Information Technology in Delhi, conducted a survey
among undergraduate and masters students in Indian Institutes of Technology in Bombay, Delhi, and Kanpur.
I tried to understand the students perception of pursuing a Ph.D. in India. A large number of students still
think that becoming an academic is the only career option after completing a Ph.D. Several did not want to do
a Ph.D. in India because they felt the research work was poor and an Indian Ph.D. had low market value.
For Devasmita Chakraverty, a doctoral student at the University of Virginia, the U.S. was the default choice
for pursuing a Ph.D. because of its leadership in science, research, education, and technology.
Most Ph.D. programs in good U.S. schools are very competitiveand have a lot to offer in terms of
resources and lifestyle. Fpr example, facilities for research, lab facilities, funding, conference opportunities,
travel opportunities, etc, Chakraverty said.
Brain Drain
Only 5 percent of Indians who go to the U.S. to earn a doctorate degree return home, as was revealed in a
study on the mobility patterns of Ph.D. graduates in science, engineering, and health.
According to the study International Mobility and Employment Characteristics among Recent Recipients of
U.S. Doctorates by the U.S. National Science Foundation, around 5,000 Indians join U.S. universities every
year for doctoral studies in these fields.
India also has the largest diaspora, with 40 percent of its home-born researchers working overseas and 75
percent of its scientists going to the U.S. A major reason behind the brain drain is the divide between
universities and specialised research institutions, with most universities not engaged in cutting-edge research
and unable to attract the best minds.
Teaching and research do not go together as happens in the worlds leading universities. Researchers across
institutions also have no occasion to engage with young minds, said Deepak Pental, a professor of genetics at
the University of Delhi.
While universities in the developed world get the largest share of research funds from their governments, only
about 10 percent of government research funds in India goes to universities.
The brain drain is also reflected in the lack of qualified manpower for Indian higher-education and research
institutions. Across the elite Indian Institutes of Technology, or IITs, there is a 43 percent vacancy of faculty
posts while half the positions in the national institutes of technology and central universities are vacant.
Brain Gain
But the tide is slowly turning. With rapid expansion of higher-education infrastructure and enabling
environments, India has been successful in attracting young researchers back home.
As the nations elite institutions try to morph from world-class teaching institutions to world-class research
centers, they have put in place flexible recruitment policies, generous research grants, and industry-academe
collaborations to attract their researchers back from foreign institutions.
At IIIT Delhi, two-thirds of academics have a Ph.D. or postdoc from a foreign university. IIT Bombay has
hired more than 100 young Indian assistant professors in the past three years, all with international experience.
When Vinay Joseph Ribeiro, an assistant professor at IIT Delhi, returned to India it was for personal reasons:
While doing my Ph.D. at Rice University in Houston, I worked with a Catholic community that wanted
some work done in Delhi. I wanted to pitch in, and thus applied at IIT Delhi, Ribeiro said.
That work is long over but I stayed on because India has changed so much. There is a lot of scope for
research that we couldnt have imagined during our BTech years. Moreover, the students are very bright and
teaching is a pleasure.
Devang Khakhar, director of IIT Bombay, confirmed the brain-gain phenomenon, noting that the number of
Ph.D.'s returning has certainly increased: One of the major reasons is that we are hiring many more faculty
several IIT Bombay alumni are faculty in foreign institutions and we have an alumni network that facilitates
recruiting faculty.
Increased financial support for research has also helped. In the past 10 years, IIT Bombay has had a 10-fold
increase in research funds.







CHAPTER 16
CURRENT BRAIN DRAIN ISSUES
The former Sovi et Union count ri es and t oday' s Russi a continue t o
experi ence a brain drain in sci ence, business, and culture, as many of t hei r
citizens leave for t he Unit ed St at es, Israel , Europe, Japan, Chi na and Lat in
Ameri ca because of dramati c politi cal and economi c changes.
In parti cul ar, East ern European countri es have expressed concerns about
brain drai n to Irel and and the Unit ed Kingdom. Lit huani a.
In West ern Europe France is currentl y experi encing a brain drain, with
young graduat es moving t o Brit ain, USA, and Canada because of economi c
and l abor regul ati ons making it extensivel y di fficult t o find white -coll ar
privat e j obs.
Certai nl y there i s a brai n drain occurring in the l ast 5 years in Germany,
with 144 814 peopl e leaving thei r count ry in 2005 due to economic
problems, the hi ghest rat e of emi grati on from Germany since t he end of
World War II.
POSSIBLE SOLUTION TO BRAIN DRAIN
Political st abili t y
Hi gher l evel instit uti on shoul d be made
Awareness about seri ous consequences
Prohi bit nepoti sm and favouritism
Adequat e sal ary for every l evel of work
CHAPTER 17
SUMMARY
Brain drain hampers the development of count ry.
Brain drain is noble for the emi grants but not for the host country.
Drained brain contri but es t o the economy of mi grated count ry whi c h onl y
infl uence the living standard of t he peopl e.

RECOMMENDATION
Amount of salary should be suffi cient for all l evel of workers to spend a
qualit y life.
Government should provide bett er opport uniti es for t he hi ghl y quali fied
student s.
Education shoul d make practi cal not j ust theoreti cal.
Trend of giving job based on rel ations should be prohibit ed.




CHAPTER 17
CONCLUSION
To concl ude we can say that t here i s a general agreement on t he maj or factors
causing Brain
Drain, worldwide from developi ng count ri es i n parti cul ar. These i ncl ude amo
ng ot hers therel ati ve expect ed income discrepanci es between l abor -importi ng
and exporti ng count ries and bett er j ob opport uniti es in labor-
importing countri es. But , t here is still a debat e on thedevel opment
consequences of Brain-Drain. From the anal ysis of the rel at ionships
bet ween brain Drai n and some development indicat ors in member count ries, i t
appears t hat the overall i mpact of brain-Drai n on t he development of a nati on
is negative; the member count ries that have the hi ghest rat e of brain Drain
tend to be l ess devel oped. The result s also support t he conventional view t hat
brain Drain has a det riment al effect on human capi tal and povert y all eviat ion.
The subj ect of Brain-Drain i s very vast. In thi s report a bri ef descripti on of
the mai n reasons of Brain-Drain and the possi ble measures to prevent it
from count ries mainl y Indi a
has beengi ven. Indiai government spent billions of rupees for education of th
e experts, butunfortunat el y these peopl e are mi grating abroad due to non-
existence of the market according t o thei r capabiliti es. Although
the count ry has been recei ving milli ons of doll ars in shape of remitt ance
whi ch these experts send back to India every year, these remi ttance are not a
substi tut e of t he expert ise of educat ed and expert people
A l arge number of Indian st udents securi ng top positions from different
universiti es had been servi ng in European compani es whil e many of t hem
have settl ed t here permanentl y aft er
getti ngimmi grat ion national it y or citizenship of these countries. The
expat ri at e Indi a is j ust visit the count ry t o meet thei r rel ati ves which is very
disappointing for t he fut ure gr owt h of the count ry. Devel oped nati ons al ways
prot ect t he experts of thei r count ry and st op thei r mi grati ng movement
by providi ng t hem incentives. There i s no short age of tal ent and mind in
Indi a but the need is to prot ect t hem and control t he mi gration of t echnical
experts, doct ors, engineers, economist and others in order t o maint ai n the
growth. The case of Indi a has also been discussed as this country has recentl y
taken seri ous st eps t hrough its poli ci es being implemented under the Hi gher
Education Commi ssi on whi ch have
yi el ded successful results. Some new initiatives of arranging int eraction of stu
dents/ youngschol ars with Nobel Laureates as an i nspi rational and moti vation
step for adoption of sci enti fi c careers have given successful resul ts.