Remittances to India slump by $6.2 bn, govt urged to take steps

The World Bank said last month that remittances — money citizens send back home from working abroad — fell for the second successive year, with India recording the biggest dip.

Experts say the signs from last year are worrying and the government must take steps to help workers take up jobs abroad, especially in the Gulf.

India received $62.7 billion last year, $6.2 billion — or 8.9% — less than the previous year. The year before, the slump had been of a mere 1%.

The decline was triggered by oil price crisis hitting the Gulf economies, where a bulk of India’s workers migrate to take up mostly labour jobs.

WHAT DOES THE WORLD BANK REPORT SAY *

The global average decline in remittances is at 2.4%. “India’s decrease of 8.9 % is a far larger percentage drop than several countries.

China, the second largest remittance recipient, recorded a 5% decline”, says Seeta Sharma, national project coordinator at the International Labour Organisation.

* Not all remittance-receiving countries showed a fall. While Bangladesh (-11.1%), Nigeria (-10%), and Egypt (-9.5%) saw a decline, Mexico and the Philippines saw inflows increase by an estimated 8.8% and 4.9%. Pakistan too saw a growth of 2.8%.

* The number of migrants who obtained clearance in low/ semi-skilled category has declined by 33% from 7.8 million to 5.2 million between 2015 and 2016.

WHY IS IT WORRYING

*From a balance-of-payments perspective, remittances are crucial for India as they ensure permanent foreign currency inflows and help finance current account deficit.

Unlike NRI deposits that can be repatriated and FDI that can be withdrawn instantly with market changes, remittances are more stable.

*Remittances to developing countries are expected to grow at a rate of 3.3%, while India’s projected growth rate is just 1.9%.

WHAT INDIA MUST DO

*“The labour market fluctuates. But what government should do is having bilateral agreements with countries to streamline the process of migration and gainful employment,” says S Irudayarajan, expert in migration studies.

*Adjustments can be made to India’s e-migrate system to further facilitate migration.

Similarly, policies restricting women’s migration should be re-considered in consultation with representative groups.

EXPERTS SAY THE SIGNS FROM LAST YEAR ARE WORRYING AND THE GOVERNMENT MUST TAKE STEPS TO HELP WORKERS TAKE UP JOBS ABROAD, ESPECIALLY IN THE GULF