NRK remittances estimated to touch Rs 75,000 cr this year
While India will be the top recipient of foreign remittances this year, earning $71 billion, over a fifth of it will come from non-resident Keralites (NRKs), says an expert on migration and remittances.
According to S. Irudaya Rajan, professor at Centre for Development Studies, Thiruvananthapuram, who has tracked NRK remittances for several years, at least one fifth of the total remittances to India would be from Keralites, mostly working in Gulf countries.
“Our estimates show that the total remittances by Keralites working abroad this year would be roughly Rs 75,000 crore,” Irudaya Rajan told Business Line.
He pointed out that Kerala received an estimated Rs 62,000 crore last year and nearly Rs 50,000 crore the year before. “Going by the uptrend in remittances in the wake of the depreciation of the rupee, Keralites’ contribution this year would be upwards of Rs 75,000 crore,” he said.
The World Bank, in its ‘Migration and Development Brief’ released on Wednesday, said India will be the top destination for global remittances this year, pushing China to the second position (with $60 billion).
“With the weakening of the Indian rupee, a surge in remittances is expected as non-resident Indians take advantage of the cheaper goods, services and assets back home. Remittances to India are expected to reach $71 billion in 2013,” the World Bank said in a statement. This will be two billion dollar more than last year’s $69 billion.
90% from Gulf
Irudaya Rajan pointed out that there are an estimated 23 lakh Keralites working outside India, mostly in the Gulf countries. “Over 90 per cent of the remittances by Keralites are from those in the Gulf,” he said. Keralaites in Saudi Arabia and United Arab Emirates topped in remittances.
He noted that though there was a significant Keralite community in the US, consisting mostly of professionals, their remittance was not substantial. “Keralites in the US intend to settle down there, and hence do not repatriate much of their savings back to India.”
In fact, he noted, many American Keralites in the Kottayam-Pathanamthitta belt were now making ‘reverse remittances’ by selling off their properties and taking the money to the US. But, Gulf Keralites regularly remitted their savings to India as they cannot settled down in the Gulf countries.
For several decades now, the Gulf remittances have been the mainstay of the Kerala economy. In spite of the very low industrial and agricultural output and the high density of population, Kerala has been able to maintain a better standard of living than many other States because of the Gulf remittances.
The Gulf remittances assume national importance because of the huge current account deficit (CAD), pegged at $70 billion, and the fact that foreign direct investment making up only about a third of the remittances from Indians abroad.
However, Irudaya Rajan noted, migration from Kerala to the Gulf is gradually falling, while migration from northern States to Kerala is going up rapidly.