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The quantum of money transferred by overseas Indians per transaction has increased, with a higher proportion being directed towards investment purposes, says a study by the Reserve Bank of India.
In 2012-13, the share of transactions with an average size of individual remittance of Rs 1 lakh and above was relatively higher at 45 per cent of the total value of remittances against 27 per cent in 2009-10.
The frequency of once-a- month remittance came down to 37 per cent (of the share in total remittances in 2012-13) against 42 per cent in 2009-10. The frequency of once-in-six months and once-in-a-year remittance rose to 16 per cent (8 per cent in 2009-10) and 17 per cent (13 per cent), respectively.
The trends seem to suggest that over the years, a higher proportion of remittances are being directed towards investment purposes, the survey said..
The use of remittances for investment purposes has gradually increased and is comparatively large in centres like Hyderabad, Bangalore, Mumbai, Lucknow, Kolkata and Jammu.
There was a significant increase in private transfers from the Gulf region, North America and East Asia, while the proportion of private transfer receipts from Europe, Africa and South America moderated during 2012-13 compared with that of earlier surveys. The survey indicates that about 57 per cent of the total remittance inflows are received in terms of dollar, while 16 per cent of remittances are received in Saudi riyal and UAE dirham. The share of Euro and pound sterling are 7 per cent and 8 per cent, respectively.
According to the survey, SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) is the costliest means of transferring funds. There has been a tapering effect in the cost of remitting compared with the previous round of survey, reflecting increasing competition and introduction of fast money transferring system.
Workers’ remittances have remained an important source of external finance for India since the last three decades.
Remittances essentially represent household income from foreign economies arising mainly from the temporary or permanent movement of workers to source economies.
A predominant portion (49 per cent) of the remittances received are utilised for family maintenance i.e., to meet the requirements — food, education, health, etc — of the migrant’s families.
ramkumar.k@thehindu.co.in
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