India the first country in the world to receive $100 billion in remittances: World Bank
According to the World Bank report “Migration and Development Brief’, India is set to receive $100 billion as remittance in 2022 an increase of 12% as compared to 2021. .In 2021 India had received $89.4 billion in remittances. India is the first country in the world to receive $100 billion in remittances from migrant workers abroad.
What are remittances?
Remittance means transfers of funds. Remittances are of two types, Inward and outbound. If a person sends money to India from abroad then it is inward remittance. If a person from India sends money to a person abroad it is called outward remittance. The World Bank reports talks about inward remittances.
Thus here remittance means money that has been transferred to Indians by non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India.
Reason for Increase in remittances to India
According to the World Bank one of the main reasons for the increase in flow of remittance to India was the wage hike and a strong labour market in the United States of America.
Highly-skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home
Highlights of the World Bank report on Remittance to India.
- According to the World Bank there has been a significant change in the pattern of remittances and in the direction of Indian migrants' destinations.
- Earlier the migration was dominated by low skill migrants to 5 GCC countries (Saudi Arabia, United Arab Emirates, Kuwait, Oman, and Qatar). They got low wages and hence they were able to send only smaller amounts to their relatives back home.
- Now highly skilled India’s are migrating to countries such as the United States, the United Kingdom, Singapore, Japan, Australia, and New Zealand where they earn high wages.
- Quoting the RBI report the World Bank says that “between 2016–17 and 2020–21, the share of remittances from the United States, United Kingdom, and Singapore increased from 26 percent to over 36 percent.
- In the same time period the share from the 5 GCC countries (Saudi Arabia, United Arab Emirates, Kuwait, Oman, and Qatar) dropped from 54 to 28 percent.
- With a share of 23 percent of total remittances, the United States surpassed the United Arab Emirates as the top source country in 2020–21.
- About 20 percent of India’s emigrants are in the United States and the United Kingdom.
Other key points of the World Bank Report
India was the largest recipient of remittance in the world followed by Mexico (2nd position), China (3rd), Egypt (4th) and the Philippines (5th).
Remittances to low and middle-income countries have grown by 5% in 2022 to around $626 billion.
Barring India and Nepal. Other south Asian countries saw a decline of more than 10% in their remittances from 2021, due to the end of government incentives introduced during the pandemic.
Other Important World Bank reports
- World Development Report
- Global Economic Prospect
- Business Enabling Environment (It will replace the Ease of Doing Business report). It will be launched in April 2024.
President of World Bank: David Malpass
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