A report published by the World Bank showed that remittances to India from its migrant workers are on track to reach a record $100 billion this year. The remittances were 5.5% higher compared to a year earlier.
With a sum of more than $100 billion, India inflows are far higher than Mexico ($60 billion), China ($51 billion), the Philippines ($38 billion), Egypt ($32 billion) and Pakistan ($29 billion). India remains on track to become the world’s largest recipient of remittances. The remittances make up almost 3% of India’s GDP.
While India is seeing an increase in foreign remittances by 12%, Nepal will see a growth of only 4% and Pakistan, Sri Lanka and Bangladesh will see an aggregate decline of around 10%.
The World Bank report also found that skilled workers from India as well as migrant workers moved not only to low-skilled, informal employment in the Gulf Cooperation Council (GCC) countries for employment but also to high-income countries like the United States, United Kingdom and Asia-Pacific countries such as Singapore, Japan, Australia and New Zealand.
Between 2016-17 and 2020-21, share of remittances from the United States, United Kingdom, and Singapore increased from 26% to 36% and the share of remittances from the 5 GCC countries (Saudi Arabia, United Arab Emirates, Kuwait, Oman, and Qatar) fell from 54 to 28%.
The US surpassed UAE as the top source country in 2020-21 with a share of 23% of total remittances.
Remittance growth increased as high-skilled Indian workers in the US worked from home and benefited from large fiscal stimulus packages and in the latter part of the pandemic, wage hikes and record-high employment conditions also aided remittance growth in the face of high inflation, news agency ANI reported.
The GCC’s economic conditions also played out in favour of India and its migrant workers. Vaccinations and the resumption of travel helped more migrants to resume work in 2022 than in 2021, ANI said.
The report also pointed out that GCC’s price support policies kept inflation low in 2022 and there was demand for labour as oil prices were high. This helped Indian migrant workers increase their remittances which also helped their families counter the impacts to some extent amid Indian inflation.
There is also the aspect of the depreciation of the Indian rupee against the US dollar (10% between January and September 2022) which may have given an advantage to the Indian migrant workers as it increased remittance flows.
“Migrants help to ease tight labour markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the COVID-19 pandemic,” Michal Rutkowski, World Bank Global Director for Social Protection and Jobs was quoted as saying by news agency ANI.
(with inputs from ANI)
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