EDEN IAS

top remittance source

UPSC CURRENT AFFAIRS | US OVERTAKES UAE TO BECOME THE TOP REMITTANCE SOURCE FOR INDIA | 20TH JULY | BUSINESS STANDARD

SYLLABUS SECTION: GS II (BILATERAL RELATIONS)

WHY IN THE NEWS TOP REMITTANCE SOURCE?

As per the RBI study, the US surpassed the UAE as the top remittance source country, accounting for 23% of total remittances in 2020-21.

TRENDS IN INWARD REMITTANCE

  • Share of remittances from Gulf Cooperation Council (GCC) region in India’s inward remittances declined from more than 50% in 2016- 17 to about 30% in 2020- 21
  • Maharashtra has emerged as the top recipient state surpassing Kerala.
  • Share of Kerala, Tamil Nadu and Karnataka has almost halved in 2020-21, accounting for only 25% of total remittances since 2016-17

REASON FOR SHIFT

  • Compositional shift in India’s migration towards advanced economies i.e., in the U.S., U.K., Canada, and South Africa, dominated by high-skilled white-collar workers.
  • Migration from India to the GCC countries slowed in the last five years due to economic slowdown
  • The sluggish oil prices, stricter labour laws, higher work permit renewal fees, and taxes in Gulf countries
  • Gulf countries that are trying to diversify away from oil revenue are favouring their citizens in employment instead of migrants.
  • India is the world’s largest recipient of remittances as on 2021, as per World Bank’s Migration and Development Brief.
  • The decline in the number of foreign workers in GCC is a worrisome trend.
  • The World Bank says GCC countries will require more skilled workers. And demand for low-skilled foreign workers will come down in the future.

SOURCE: BUSINESS STANDARD