Factors driving remittances into India

In our last article (Migration and Remittances: An ecosystem that co-exist), we explored the understanding between two factors, migration and remittance. In this article, we take a look at the factors that could play a major role in influencing remittances into India.

In recent times, an increase in remittances to India can primarily be attributed to many reasons. According to policy experts, factors responsible for the growth in remittances include the role of various channels to remit wealth, shifting emigration pattern to highly skilled intensive operations, greater competition in the money transfer market and the extent of economic activity in the source country. The most significant factor in the surge of remittances, ultimately, may be the way NRIs perceive the Indian economy. Though the liberalization of the Indian economy in 1991 was a clear benchmark, its real significance has taken time to crystallize. Indian economy has been witnessing an incremental growth since the last decade. Commensurate with the increase in the number of migrants from India, remittances have been growing since the past decade. * Perhaps the most crucial factor in the remittance market is a sound macro economy and a good investment environment. Migrants will remit more and might also prefer to invest remittances in activities with a substantial multiplier effect.

Thus, a positive investment climate could also be one of the key factors for driving remittances into India. With increasing incentives and tax exemptions coupled with liberalized foreign exchange controls, remittances might just continue to grow.

* Migration and Remittances Factbook 2011

 

2 Responses to Factors driving remittances into India

  1. Timothy Catchpole says:

    Very Nice website. I just finished mine and i was looking for some design ideas and your website gave me some. May i ask you whether you developed the website by youself?

    Thank you

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