Friday, 14 May 2010

Gulf remittances leave some Indian families in the dust

It is a muggy Monday morning in a small town in Kerala, India. The local bank is about to open. Outside its doors, under the shade of a coconut palm, sit a dozen customers waiting to withdraw funds from their NRI (non-resident Indian) bank accounts.

These accounts, kept jointly with their children in the Gulf, are replenished at regular intervals. With this money, these customers will pay for many of their household expenses.

This scene can be replicated, with minor variations, across Kerala and beyond. If all these instances are amalgamated, the cash withdrawn equals 3 per cent of India’s current GDP. It is a staggering figure, one that sheds light on how important foreign remittances are to India’s everyday functioning.

Nowhere is this more apparent than in the southern state of Kerala. Earlier this decade, foreign remittances, most of which originated in Gulf countries, constituted 22 per cent of the state’s economy.  Read more

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