News of Rishi Sunak becoming UK PM or Sundar Pichai and Satya Nadella heading big tech firms, often give goosebumps to Indians back home taking pride in the diaspora’s achievements. But beyond the sentiment, more than 1.33 crore Indians residing and working abroad, joined by almost a million every year, also contribute to the country’s economy by sending back cash. These funds which NRIs and Indians staying overseas for work invest in the home country or send back to their relatives are called remittances, which are set to hit a record of $100 billion this year.
Expats defying global economic crisis
According to the World Bank, remittances in lower and middle-income countries have surged by as much as 5 per cent, even when the world along with western economies, are facing turbulence. Despite layoffs in the tech sector across the US and other countries, the remittances for India have reached the massive number, thanks to wage hikes and labour markets in developed countries. The remittances this time around are also almost $11 billion higher than the previous year.
Lifted up by a falling Rupee?
A drop in the Rupee’s value may be bad news for us back home, but it increases the amount of money sent from abroad. Anyone who earns in dollars, euros or pound sterling, can invest more in India or their relatives can spend more, since those currencies gain strength against the Rupee. But while remittances gain from the Rupee’s fall, they also contribute 3 per cent of India’s GDP, and improve the cashflow.
India in the global workforce
The cash sent by migrant workers to their families back home in India is the highest for any other country, and a long way ahead of Mexico, China and Phillipines. As compared to the Indian diaspora, China has six lakh people working in other countries, which explains the difference. The highest amount of remittances for India came from people earning big in UK, US and Singapore.
Apart from India and Nepal, no other Asian country has recorded a surge in remittances, in fact all of them will see a 10 per cent decline. The economic jolts in Pakistan, Bangladesh and Sri Laknka will also cause a drop in money coming from their migrants abroad.
