$21B from overseas remittances
Tuesday, June 13, 2006
NEW DELHI: Investment bankers J P Morgan stated in a study that India is the largest recipient of remittances by overseas workers who account to about 20 million, estimating a substantial $21 billion.
Noting a 150 percent rise since 1995, experts pointed out that relaxed immigration laws in the US, UK and Canada encouraged overseas migration in the 90s. RBI figures released recently noted remittances were twice the amount of net foreign institutional investor inflows and a quarter of the merchandise export earnings of the country.
Deposits by NRIs amount to around $32 billion which is 23 percent of foreign exchange reserves. Portfolio and real-estate investments have been largely concentrated in the IT space. The Indian diaspora, stated the report, could act as a powerful catalyst to help India realize its objective of 10 percent annual GDP growth, if the Indian Government capitalized well on this potential.
Overseas Indian Affairs Minister, Vyalar Ravi has proposed a plan to set up a welfare fund for overseas workers in an effort to recognize the interests of the growing Indian diaspora. The Ministry proposes to use the fund for compulsory health insurance of overseas workers and extend this and other facilities to the family members too. The plan for this has been submitted to the Prime Minister, Manmohan Singh for his approval.