Domestic remittances have fallen by about 20 per cent in the second wave of the Covid-19 pandemic, that has once again led to State level lockdowns and rising unemployment.
Industry data reveals that these remittances, which are largely by migrant workers to their families, have fallen across the country though not as sharply as last year during the national lockdown. “There is a drop in urban remittances, primarily because of the lockdowns. Work is stalled at many places due to which wages are stalled as well. There are also reports of workers returning to their villages,” said Abhinav Sinha, co-founder, Eko India.
10-20 per cent drop
Many of the agents are also unable to service customers throughout the day due to the lockdown. “The remittances industry is down between 10 per cent to 20 per cent with larger centres more impacted than smaller centres,” Sinha said, adding that just before the second wave, remittances had almost normalised.
Dilip Modi, founder, Spice Money also noted that remittances had started picking up again in the January to March quarter but were impacted in the second half of April and May due to the lockdowns. “Remittances from urban to rural have been fluctuating but all the financial services of cash withdrawal, cash deposit within rural areas have been growing. A lot of migration into rural India has also happened,” he said.
PayNearby, which has an 11 per cent market share in domestic money transfers saw a drop of 20 per cent to 25 per cent in remittances. “This could widen further if the strict lockdowns continue in most parts of the country. We have started to see some amount of reverse remittance, where families from villages and rural India are sending money to support the workforce in cities,” said Anand Kumar Bajaj, Founder, Managing Director and CEO, PayNearby.
The fall in domestic money transfers comes at a time when labour markets are also disturbed. Data with the Centre for Monitoring Indian Economy shows that the unemployment rate for the week of 23 May shot up to 14.73 per cent on an all India basis. It was even higher at 17.41 per cent for urban areas.
Expectations are that remittances will begin to slowly recover after the lockdowns are lifted and may take about four to five months after that to return to normal.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.