Open Letter to Prime Minister YAB Datuk Seri Anwar Ibrahim:

Budget 2025: Closing the Economic Divide – Empowering the Malaysian Indian Community for Inclusive Growth – Not a Zero-Sum Approach – Promoting Prosperity for All Ethnic Groups

The Budget 2025, presented by Prime Minister YAB Datuk Seri Anwar Ibrahim, aims to drive sustainable and inclusive growth for all Malaysians. However, the Malaysian Indian community continues to face significant disparities in wealth distribution and socio-economic participation. This analysis highlights these disparities and outlines targeted strategies to improve the economic standing of the Indian community, ensuring their contributions to Malaysia’s national development.

Correcting the Economic Disparities of the Indian Community

According to the 2024 data, the Indian community now constitutes 6.5% of Malaysia’s total population, down from earlier estimates of 6.8%. Despite this, the Indian community holds a disproportionately small share of the nation’s wealth. Available data suggest that Indians hold approximately 1.5% to 2% of the country’s wealth. However, much of this wealth is concentrated in the hands of a few super-rich Indian tycoons, leaving the vast majority of the 2.07 million Indian Malaysians with less than 0.5% of national wealth.

In comparison, Bumiputera ownership stands at 22.3%, while Chinese ownership is at 34%. This leaves a remaining share of wealth, which is held by:

• Foreign investors, who own significant portions of Malaysia’s manufacturing, finance, and real estate sectors.

• Government-linked companies (GLCs) and institutional entities like Khazanah Nasional and the Employees Provident Fund (EPF), which hold assets in infrastructure, utilities, and strategic industries.

• Other minority ethnic groups, including the Orang Asli, indigenous communities in Sabah and Sarawak, and smaller ethnic groups.

Addressing the disparity in wealth distribution is essential to ensuring that the Indian community can improve its socio-economic standing and contribute meaningfully to the nation’s growth. Targeted financial and educational initiatives are critical to closing this gap.

Educational Access and the Need for Quotas

Education is a key mechanism through which wealth disparities can be addressed. Currently, only 7% of public university matriculation and foundation program placements are allocated to non-Bumiputera students, including Indians. This limited quota creates a highly competitive environment where the best of the best among non-Bumiputera students vie for these few available seats. As a result, many high achievers within the Indian community are unable to secure placements.

Many qualified Indian students find themselves unable to access public university education due to these stringent constraints. While some may opt for expensive private education, which can lead to significant financial burdens on families, many capable students cannot afford even these options. This leads to a troubling trend where numerous bright students end up pursuing inferior programs that do not match their potential or aspirations, based solely on affordability. Furthermore, a significant number of students forgo higher education altogether due to financial constraints, ultimately leading them to take up jobs as semi-skilled or unskilled workers, which perpetuates the cycle of economic stagnation and inequality.

Expanding the quota for Indian students to 10-12% can be achieved through strategic investments in increasing the capacity of public universities, such as expanding infrastructure, enhancing resources, and improving faculty recruitment. This approach ensures that the increased quota for Indian students does not come at the expense of other ethnic groups’ opportunities. By enhancing overall capacity, more students from all backgrounds can benefit from higher education, fostering an inclusive environment that supports a diverse student body. This will help bridge the educational gap, providing more access to affordable public university placements and reducing financial pressure on Indian families. Collaboration with industry leaders, especially in STEM, to provide internships and career pathways for graduates will enhance their employability.

Proposed Economic Empowerment Strategies: Short-Term, Medium-Term, and Long-Term

To address these challenges, a comprehensive strategy targeting financial empowerment, education access, and business support is essential. Below are short-term, medium-term, and long-term strategies designed to uplift the Indian community without negatively affecting other ethnic groups.

Short-Term (1-2 Years)

1. Entrepreneurship Grants and Financing Facilities

Establish a RM 200 million fund to provide low-interest loans and grants for Indian entrepreneurs, focusing on high-growth sectors like technology, services, and agriculture. This fund should target micro and small businesses, ensuring that even smaller enterprises can grow and contribute to the economy.

Medium-Term (3-5 Years)

1.            Special Economic Allocations through ASM (RM 500 Million to RM 1 Billion over 5-10 Years)

The Amanah Saham Malaysia (ASM) program should introduce a yearly allocation of RM 500 million to RM 1 billion, to be distributed over a period of 5-10 years, exclusively for Indian B40 and M40 families. This allocation should follow the successful model of Amanah Saham Bumiputera (ASB), providing low-risk investment options and financing structures to help Indian families build wealth.

2.            Increase Matriculation and Foundation Quotas for Indian Students

The current 7% quota for matriculation and foundation placements in public universities should be increased to 10-12% for Indian students. This expansion will help bridge the educational gap, providing more access to affordable public university placements and reducing financial pressure on Indian families.

3.            Scholarships for Indian Students in Private Institutions

Introduce a special scholarship fund of RM 200 million annually to help Indian students pursue higher education in private universities. This will ensure that students who are unable to secure public placements are not left behind due to financial constraints.

Long-Term (5-10 Years)

1.            Increase Indian Economic Share to 6% by 2035

Through sustained investments in education, entrepreneurship, and ASM allocations, the Indian community’s economic share can increase from its current below 0.5% to 6% by 2035. This target can be achieved by supporting Indian-owned businesses and ensuring greater access to high-growth sectors.

2.            Public-Private Partnerships for Business Growth

Foster partnerships between Indian-owned businesses and multinational corporations to promote innovation, technology transfer, and job creation in sectors like digital services, renewable energy, and semiconductors. A RM 500 million Innovation Fund should be established to support Indian startups in these industries, ensuring they can compete on a global scale.

Justifying Economic Empowerment for the Indian Community

Equitable Growth, Not Zero-Sum

The proposed strategies are designed to complement existing programs for Bumiputera and Chinese communities, not replace them. For example:

• Bumiputera programs, such as ASB and MARA, remain intact and continue to provide substantial support to uplift the Bumiputera community.

• Chinese entrepreneurs remain dominant in sectors like trade and business, and expanding Indian participation in high-tech sectors like AI and renewable energy will increase market opportunities for all.

These proposals do not reduce or infringe on the rights of other races. Instead, they seek to level the playing field by ensuring that the Indian community has access to the same opportunities for growth and development.

Promoting National Economic Growth

By empowering the Indian community, Malaysia benefits from a stronger, more diverse workforce, particularly in high-tech industries that are essential for global competitiveness. Ensuring that the Indian community has access to higher education and entrepreneurial opportunities strengthens Malaysia’s knowledge economy, fostering innovation and increasing the country’s attractiveness to foreign investors.

Furthermore, by addressing inequality, the government reduces social tension and economic dependency on welfare, freeing up resources for infrastructure and regional development that benefit the nation as a whole.

Conclusion: Growth Without Displacement

The Indian community has long been underrepresented in Malaysia’s economic fabric, with wealth and opportunities concentrated in a small portion of the population. The proposed strategies seek to increase the economic share of the Indian community from below 0.5% to 6% by 2035, ensuring that this underrepresented group can participate fully in Malaysia’s national progress. Importantly, these measures are designed to complement existing entitlement programmes for Bumiputera and Chinese communities, ensuring inclusive and sustainable growth for all Malaysians.

I urge you, Honourable Prime Minister Datuk Seri Anwar Ibrahim, to be the first Prime Minister to implement serious strategies that address the socio-economic disparities faced by the Indian community. By adopting these comprehensive short, medium, and long-term strategies, we can work together to close the economic divide and promote prosperity for all ethnic groups in Malaysia.