Non-Resident Indians, Migrant Workers Will Send Rs 8 Lakh Crore To India This Year: Highest In The World!
When it comes to remittances, India and China beat them all. This year around, if we are to go by the data of World Bank report published Wednesday, then remittance flows to India will rise 12% to reach $100 billion this year. This puts its inflows far ahead of countries including Mexico, China and the Philippines.
India Tops the Remittance Inflow
This record amount of money sent home by migrant Indian workers will boost the finances of Asia’s third-largest economy and eventually lead it to retain its spot as the world’s top recipient of remittances.
As per the report, highly skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home. Recent years have witnessed Indians moving from doing lower paid work in places like the Gulf.
Other reasons affecting the growth are wage hikes, record-high employment and a weakening rupee.
Remittances Contribute to 3% Indian GDP
Inflows from the world’s largest diaspora are a key source of cash for India, which lost almost $100 billion of foreign exchange reserves in the past year amid tightening global conditions that weakened currencies including the rupee against the dollar.
A crucial part of filling fiscal gaps is done by Remittances, which account for nearly 3% of India’s gross domestic product.
As compared to 26% in 2016-17, cash transfers to India from high-income countries climbed to more than 36% in 2020-21.
The world bank said that during the same period, share from five Gulf countries, including Saudi Arabia and the United Arab Emirates, declined to 28% from 54%.
When it comes to South Asia, the trends are not uniform. The remittances from the Bangladesh, Pakistan and Sri Lanka are expected to drop this year, this can be attributed to the countries being hit by domestic and external shocks.
The report said that “Migrants responded to exchange rate depreciations in home countries by sending less money through formal channels and opting for black-market premia in the parallel exchange markets”.