send most money back home
21 Oct 2007, 0046 hrs
NEW DELHI: India has displaced
China and Mexico to become the top remittance receiving
country in the world, according to latest data released by the
World Bank. Indians working in foreign countries sent back
over $25.7 billion (roughly Rs 1,28,500 crore) as remittances
in 2006, followed by Mexico ($24.7 billion), China ($22.5
billion) and the Philippines ($14.9 billion).
To put the scale of the
remittances in perspective, consider this: money received by
India through this route is roughly the same as the
country’s total estimated annual expenditure on defence, or
about five times the estimated expenditure on education in
2007-08. Total income tax and wealth tax collections in the
country are less than the remittances received. And they are
over three times the foreign direct investment in the country
However, the remittances make up
only about 3% of India’s GDP. In several small countries,
remittances are a much bigger share of the national economy.
Thus, in Moldova, remittances are equivalent to 38% of its
GDP. Other countries in which remittances are over 20% of GDP
include Tonga, Guyana, Haiti, Lebanon, Tajikistan, Honduras
and Jordan. In the Indian subcontinent, Nepal receives
remittances equivalent to 15% and Bangladesh 9% of their GDP.
Among the Indian states, Kerala
and Tamil Nadu provide almost half of the total immigrants
from India. These are followed by Karnataka, Gujarat, Andhra
Pradesh, Maharashtra and Punjab.
A study conducted by the Centre
for Development Studies, Thiruvananthapuram, showed over 25%
of households in Kerala have at least one person working
Sheer numbers and relatively
higher skill levels appear to be driving the growth in Indian
remittances. The World Bank study estimates that the number of
Indian immigrants is about 10 million. Mexico and Russia are
the top immigrant sending countries with an estimated 11.5
Interestingly, the bulk of
remittances are being sent not by highly skilled professionals
like doctors or software engineers, but by more humdrum
workers, wage employees and service providers.
Apart from increased
international flow of labour, better means of transferring
funds, like electronic transfers, are contributing to the
rapidly increasing remittances.
This is borne out by the fact
that the business of wire transfer companies is booming, with
estimated revenues of $15 billion in 2006, and up to 30%