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India Becomes the Highest Recipient of Remittances:

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Why in the news?

According to the World Bank’s Migration and Development Brief, India has become the world’s largest recipient of Remittances, receiving USD 87 billion (a gain of 4.6 % from previous year) in 2021.

Key highlights:

• India is followed by China, Mexico, the Philippines, and Egypt.
• The United States being the biggest source, accounting for over 20% of all Remittances.
• In India, remittances are projected to grow 3% in 2022 to USD 89.6 billion.
• Remittance outflow from India in 2020 was USD7 billion. In 2019, it was around USD7.5 billion.

Factors for Remittance Growth:

• Migrants’ determination to support their families in times of need, aided by economic recovery in Europe and the United States which in turn was supported by the Fiscal Stimulus and employment support programs.
• In the Gulf Cooperation Council (GCC) countries and Russia, the recovery of outward remittances was also facilitated by stronger oil prices and the resulting pickup in economic activity.
• The severity of Covid-19 caseloads and deaths during the second quarter (well above the global average) played a prominent role in drawing substantial flows (including for the purchase of oxygen tanks) to the country.
• Flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the Covid-19 crisis.

Projection for 2022:

• Remittances are projected to grow 3% in 2022 to USD 89.6 billion, because of a drop in overall migrant stock, as a large proportion of returnees from the Arab countries await return.

Migration and Development Brief:

• Migration and Development Briefs are prepared by the Migration and Remittances Unit, Development Economics (DEC).
•  The brief aims to provide an update on key developments in the area of migration and remittance flows and related policies over the past six months. 
• It also provides medium-term projections of remittance flows to developing countries. 
• A special topic is included in each brief. 
• The brief is produced twice a year.

Remittance: 

• It is money usually sent to a person in another country. The sender is typically an immigrant and the recipient a relative back home.
• Remittances represent one of the largest sources of income for people in low-income and developing nations.
• Remittances help in stimulating economic development in recipient countries, but this can also make such countries over-reliant on them.

Additional information:

World Bank:

• Founded: July 1944.
• Headquarters: Washington DC, USA.

President: David Robert Malpass.