The Hindu Business Line : `India largest recipient of remittances in Third World'

INDIA has become the largest recipient of private transfers in the developing world with $14.8 billion in 2002-03, and its share in the global flows is at around 3 per cent. This was stated by Dr J.M.I. Sait, a former Director, UNIDO.

Remittances from Indians abroad have traditionally been the principal source of invisible earnings. According to Dr Sait, India's invisible earnings were dominated by private transfers, comprising mainly workers' remittances (35.4 per cent), followed by software (22.3 per cent) and other business services. Official estimates of remittances by migrants are in the order of $100 billion annually, of which 60 per cent goes to developing countries. The share of developing countries has more than doubled between 1998 and 1999. India has topped the list of remittance-recipient countries, he said.

According to the World Bank report on Global Development Finance 2003, in 2002 South Asia received $16 billion in remittances. This is the second highest among developing country regions and equals 2.5 per cent of the GDP for the region. For 2001, India alone received $10 billion, and was the largest recipient of remittances in the developing world, the report said. It has also forecast a rise in FDI in South Asia from $5 billion to $9 billion 2005.

Dr Sait, who was here in connection with the workshop on `Enterprise development for the returning migrants in Kerala,' said that remittance to India steadily increased from $2,707 million in 1980-81 to $12,125 million in 2001-02, that is, by 4.48 times. The rupee equivalent rose from Rs 2,137 crore in 1980-81 to Rs 58,756 crore in 2000-01 registering a change of 27.40 times, which was grossly because of the inflation and devaluation of rupee. The figure in 2001-02 was slightly lower at Rs 57,821 crore, he pointed out.

In a 2001 RBI study reviewed by the High-Level Committee on Indian Diaspora, it was found that the foreign currency pumped into the monetary system by way of remittances was steady during 1997-98 and 1998-99, the inward remittances recording a rupee quantum jump of 1.67 times; local withdrawals from repatriable deposits declined by 39 per cent and the value of gold and silver brought in also fell sharply by 93 per cent while gifts and charities increased by almost 50 per cent. In 1999-2000 the inward remittances remained firm, withdrawals from repatriable deposits increased to 2.29 times, gold and silver brought in fell to 8 per cent, while gifts and charities further increased by 13 per cent, he said.

The NRE deposits in Kerala have been showing a phenomenal growth with it going up from Rs 2,304 crore in 1991 to Rs 28,871 crore as on June 30, 2003. It was Rs 24,534 crore in 2002, he added.

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