There are, of course, many good reasons for NRIs to park their money in India in the three schemes that are now in operation. Clearly, they earn a little more from these deposits than they can hope to get in developed economies, where such schemes will earn them much less.

Such deposits are also a reflection of their confidence in the Indian economy, its growth potential and financial system, where their money is not only safe but can also get good returns.

Finally, NRIs do have a social and emotional connect with the country they belong to and investing in these deposits gives them that extra satisfaction.

The social bond that NRIs have with this country can be an effective argument only as long as investing in India continues to make economic sense for them. So, an increased reliance on NRI deposits to help meet the country's capital flow requirements is not without risks and should not be played down just because the money is coming from NRIs.

With some additional help from the International Monetary Fund and the World Bank, the Indian economy was saved from an imminent collapse.

It is only after the government of the day took those initial confidence-building measures that NRIs returned to India with their deposits. In 1991-92, NRI deposits fell, only marginally and that was mainly because the measures taken by the government then had prevented a steeper fall.