Remittances, inward: India
This is a collection of articles archived for the excellence of their content. |
Contents |
Impact on Kerala
2016
The Times of India, May 06 2016
Subodh Varma
The simmering crisis in the Gulf region, an impact of plummeting oil prices and global economic woes, is sending ripples across the seas to pollbound Kerala. There are over 2.4 million Keralites working abroad of which 85% work in the Gulf region, according to the Kerala Migration Study (KMS 2014) by Centre for Development Studies, Thiruvananthapuram. That's over 2 million emigrant workers.
The remittances sent home by this huge workforce is estimated at Rs 24,374 cr while total remittances, which include investment flows etc.add up to over Rs 71,142 cr as per the study. About 19% households currently had an emigrant member while another 29% had in the past.
Remittances make up over a third of the net state domestic product -20% more than the revenue income of the state government and five times the funds the Centre gives the state.
But all this is changing. Since 2014, remittances inflow started faltering; it has since dipped by over Rs 23,350 cr in 2015 (World Bank). This follows a smaller slip in 2014. Can this likely impact the elections? The decline is not big, it will not have a big effect says S Irudaya Rajan, CDS professor and a co-author of the study . The impact will be visible if the decline continues for three to five years, he believes, adding that the emigrant Keralite does play a significant role in elections.
“In earlier elections, about 10,000 emigrants came back to vote. But more importantly , the 2.4 million Keralites working abroad have their wives, brothers, sisters and parents, estimated to be about 10 million votes in Kerala. They can change the political scenario of Kerala, if they influence their families,“ Irudaya Rajan said.
The long term trends of emigration are not very rosy says the KMS analysis. Emigration is likely to decline not because of external factors but due to Kerala's contracting youth population, better education, higher wages in India and prospects in other states.
There were an estimated seven lakh migrants living in other states of India in 2014 while about four lakh Keralites had returned back to the state after working in other states.While these numbers are small compared to emigrants going abroad, but adding the two together, the total number of Keralites seeking work outside the state is enormous. This is an indication of the severe employment crisis in the state which will cast a shadow on the electoral process.
Remittances and the global oil economy
2016
Remittances slip on oil, down $1.5 billion
Subodh Varma
Global economic slow down and turmoil has led to a decline in remittances -money sent from Indians working abroad -in 2015, an estimate by the World Bank indicates.
Although India still continues to be the topmost remittance receiving country , the flow was $68.9 billion in 2015, a dip of about $1.5 billion over 2014.
This is the first time since the global financial crisis of 2008-09 that remittances have gone down.
Falling oil prices, sluggish growth in the United States, slowing economies in Europe and adverse currency exchange rates have contributed to this decline, said DilipRatha, who heads the World Bank unit responsible for studying global migration and remittances.
“India gets remittances from all over the world but the bulk comes from the oil producing Gulf countries, US and also Europe. The effect of oil glut and resultant downswing of economies in the Gulf countries has had some delayed impact on remittances,“ he told.
The effect of global economic turmoil was becoming evident in remittance flows to India since 2013 when yearly growth plummeted to just 1.7% over 2012. In 2014, inflows increased by just 0.6% . The last time remittances had declined was in 2009.
For countries where clear data is not available, the number of migrants from a country , and the cost of living in both the source and receiving countries are used to work out an estimate of remittances, Ratha explained. The data also does not capture money flows through informal channels, like hawala.
A notable feature of India's inbound remittances is the $9 billion coming in from the neighbours. These are based on estimates made by UN of Indian born people residing in these countries.
