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An Overview Of The Remittance Industry In India

By Author: Reuben Williams
Total Articles: 1

As indicated by the current reports of the World Bank, India has again aced the list of Inward Remittances. It got around $69 billion in 2017. Internal remittances are the cash, which are exchanged or sent by the Non-residents Indians, based abroad, to their family, companions, and relatives back in India. It can be as remote cash, traveller’s cheques, or demand draft. India has now turned into the main beneficiary of remittance in the world. India has held on the best position for 5 years continuously.

What does this mean for the economy?

As per the Ministry of Overseas Indian Affairs (MOIA), a total of over 25 million NRI are known to add to the internal remittance. Consistently they send money to India in remittance to their loved ones and families in India. There are numerous families who require cash to be sent to them by their relative's working abroad. Internal remittance conforms to 22%– 23% of the nation’s inward cash flow. In spite of the fact that India does not vigorously rely upon this cash, still it is a boost to the economy.

Around 4.5 % of the Indian family units gets normal remittance. It goes about as a maintenance for the beneficiary's family unit. States which receive these are Karnataka, Kerala, Andhra Pradesh, Punjab, et cetera. It likewise adds to around 3% – 4% of the nation's Gross Domestic Product(GDP). In this manner, these private exchanges are supporting the Indian’s need for remittance. In 2012 – 2013, India had received around $67.6 billion and in the year 2013– 14, it developed to $70 billion, taking India to the best position. In 2012, internal remittance surpassed the FDI inflow of $ 46.84 billion. Which prove how critical is internal remittance for the Indian economy.

A historical perspective

There has been a gigantic improvement in the internal remittance, since it began to flourish from 1991, when the markets opened. In 1991, remittance was accounted to be $ 2.1 billion, and from that point, until 2014, it has developed to $70 billion. From that point forward it is developing relentlessly, with the exception of in the year 2003-04 when it plunged than its earlier year. In 2007, it asserted to contribute 12% of the world's remittance.

Earlier, it used to be just the low skilled temporary labourers who might contribute towards the remittance. However, with the flourishing IT business, things have changed. IT experts have begun to flourish in different nations. They are now the major contributors to inward remittances using services like ICICI M2I.

The current scenario

As of late, the RBI had been seeking NRIs to contribute and send money to India. In 2010, there was a de-direction on the loan costs of the NRO and NRE accounts, hence encouraging the NRIs to store and bank in India. One more factor for the rise of remittance was the solid exchange rates of the US dollar. With the widening gap, Indians prefer sending money abroad as they get better value for the dollars

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