In 1991, India received only $3 billion as remittances. The current numbers are 22 times that of 1991, indicating a staggering increase in money coming back to India.
According to the Migration and Development report of the World Bank, the Indian diaspora remitted $69 billion in 2017, a 9.5% increase from 2016. In 1991, India received only $3 billion as remittances. The current numbers are 22 times that of 1991, indicating a staggering increase in money coming back to India. Globally, India topped the remittance recipients, followed by China $64 billion, Philippines with $33 billion, Mexico with $31 billion, Nigeria with $22 billion, and Egypt $20 billion respectively, as mentioned in a report in Business Standard.
A remittance is a fund transfer that expatriates send to individuals in their home country via wire, mail or money transfer. This transfer of fund across borders is one of the largets financial inflows to the countries that receive them.
The International Fund for Agricultural Development (IFAD), a specialised agency of the United Nations agency, noted in June 2014 that, close to $6.5 trillion will be remitted to developing countries between 2015 and 2030. Half of the remittances will go to areas where poverty and hunger are the highest. Gilbert Houngbo, President of IFAD said, "Remittances are vital for millions of families, helping them to address their development goals,"according to the daily.
Increase in remittances is expected to continue this year as well because of strong economic conditions in countries like the USA as well as because of increase in oil prices that's likely to fuel remittances from workers in Bahrain, Oman, Qatar, Kuwait, Saudi Arabia and UAE.
In India, Kerala received the maximum amount of remittances (40%), followed by Punjab (12.7%), Tamil Nadu (12.4%), Andhra Pradesh (7.7%), and Uttar Pradesh (5.4%) respectively.
Despite remittances coming at a steady pace, their contribution towards GDP has declined. In 2017, remittances contributed 2.8% to India's GDP, which is the same as 2016, as noted by the World Bank. In the past six years, the contribution of remittances to GDP fell by 1.2%, while the average remittance was about $68 billion. In 2011-12, remittances were 4% of the GDP, the highest in the last six years, as a 2012 report in Hindustan Times mentioned.
While remittances are expected to rise in 2018, the number of migrant workers fell nearly 34% compared to 2015, according to the Migration 2018 report of the International Labour Organization (ILO). In seven years leading up to 2017, number of workers migrating fell by 39%.
SOURCE: Business Today
