Remittance means the transfer of funds by an expatriate to his/her motherland using different means of transfer. Online, wire and mail are some examples. Remittance is not only important from the point of view of a person but from the economy of the country as a whole. Money sent by people across borders play a great role in the Gross Domestic Product or GDP of the country.
A large number of Indians work abroad. They transfer money to India on a regular basis. This is an important stream of income for many families. At the same time, it also boosts the Indian economy to a great extent.
India tops the list of remittance countries
India recorded the highest number of remittance (in numbers and value) last year. Not only it retains the top position, but there has been a record increase on YOY basis. People use different modes of remittance, e.g. foreign exchange bureau, commercial banks (private and public sector), cooperative banks, Indian Post and several commercial agents. The preferred mode depends on individual’s preference, availability, and convenience.
Money transfer to India from US showed a remarkable increase after the Information Technology boom post 1995. As the number of people working in US increased exponentially, remittance volumes also showed similar patterns.
Fall in the Rupee rate brought cheer to NRI population
Though the fall of Indian Rupee against the US Dollar is the matter of concern for the Indian economy, it is definitely a reason to grin for the NRIs. It means they get more Indian Rupees against their Dollars. In the year 2015, the fall was around 10 percent. It resulted in the phenomenal increase of 20 percent in the volume of remittance fromUSA to India.
Also, the incredible infrastructure development triggered huge investments by NRIs in commercial and residential properties. It is again a good sign for the country. It means that money coming to India in the form of Dollars will be absorbed in the Indian economy. Economic experts call it the “second independence” of India.
The government supports remittance
Since it is good for the economic health of India, the government supports remittance by offering several deposit schemes and bonds. These schemes are dedicated to the NRIs, and there are several benefits and concessions for them.
All these factors boost remittance greatly. The remittance companies lower the costs for transactions. They offer attractive incentives and discounts to grab the maximum market chunk