India tops remittance recipients' list

India tops remittance recipients' list: "India tops remittance recipients' list
Tuesday, March 13, 2007

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New Delhi: Last year India received $23.4 billion in funds, making it the largest recipient of remittances. The inflow was growing at around 20 percent every year Western Union South Asia Managing Director Anil Kapur said at the prelude to The Economist's business roundtable with the government.

Global remittance business, he added, was worth $269 billion and was growing at eight percent per annum reported a national daily. Over the last five years, remittances into India have doubled and Kapur added that remittances, which now account for three percent of India's GDP, are more than FDI and FII inflow put together.

According to the Economic Survey, FDI flows into India stood at $4.7 billion and FII inflows were $12.5 billion n 2005-06.Kapur said there were 111 million migrants from India worldwide and by 2050 the number would reach 280 million.

'Most importantly, remittances are fuelling consumption and promoting literacy and economic development in rural India. Fifty-four percent remittances are being spent on family, 20 percent put in bank accounts and 13 percent invested in land and property,' added Kapur.

Therefore, there is a need to build more financial institutions in rural India. 'Lackof financial institutions in rural India is a major drawback. India has only 65,000 bank branches and 300 million bank accounts. We should create more financial outlet in rural India. We have 155,000 post offices all over the country and we should tap their potential to connect to rural India," Kapur said.