New Delhi, February 26:

The ministry of overseas Indian affairs is seeking a special allocation in the 2007 central budget for the creation of a welfare fund for overseas Indian workers.

In a letter to prime minister Manmohan Singh and finance minister P Chidambaram, minister for overseas Indian Affairs Vayalar Ravi has stressed the urgency to undertake a slew of welfare measures for overseas Indian workers as also workers who have returned to India, according to informed sources.

“The temporary migration of unskilled, semi-skilled and skilled workers mostly to the Middle East is unique in that the social cost of education or vocational training is modest while the economic and social benefits derived from remittances or skill formation are significant,” Ravi said in the letter.

There are around five million Indian workers in the Middle East and Gulf nations and they contribute to around 50 percent of the total annual remittances of $25 billion sent by overseas Indians.

Ravi said that there was evidence to suggest that remittances from overseas Indian workers — most of whom are based in the Gulf — were significantly higher than remittances from others.

He pointed out that overseas Indian workers who return can increase the incidence of unemployment by exerting pressure on the scarce job opportunities in the rural areas.