REMITTANCES TO INDIA ARE ESTIMATED TO DECLINE BY IN FY2021: GLOBAL BANKING GROUP

REMITTANCES TO INDIA ARE ESTIMATED TO DECLINE BY IN FY2021: GLOBAL BANKING GROUP 

• This is due to the economic crisis induced by the COVID-19 pandemic. 
• Many Indians working in the Gulf region had recently lost jobs and more layoffs are in the offing. 
• As per the report, every 10% decrease in oil prices reduces remittances to India by 7% in the long run. 
• The weak economic outlook of the US would adversely affect employment and/or incomes of migrant workers. 
• Remittances refer to the value of money transfers that are sent from the workers residing abroad for more than 1 year to the home country. 
• In FY20, India was the largest recipient of remittances (in value terms) in the World, with remittances amounting to 2.7% of GDP. 
• Gulf region accounted for more than half of this. 
• Importance of Remittances 
• Stability to current account balance: Current Account constitutes net income, interest, and dividends and transfers such as foreign aid, remittances, donations among others. 
• Also, remittances are associated with higher spending on education, reduced child labor in disadvantaged households, alleviating poverty and improved nutritional outcomes, etc. 
• Recently, the government initiated SWADES initiative for skill mapping of citizens returning 
  

Source: Indian Express