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Remittances in India: Facts and Issues

Author

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  • Chinmay, Tumbe

Abstract

This paper provides a fact sheet of domestic and international remittances at the State level and across household characteristics and discusses the extent of remittance dependency, it’s growth since the 1990’s, the different uses of remittances across States, the possible impact on source region inequality and its importance in enhancing ‘financial inclusion.’ Data from the 49th and 64th round migration related National Sample Surveys, the Reserve Bank of India and the 2001 Census are used for the analysis. Some of the findings are: (a) The domestic remittance market was estimated to be $10 billion in 2007-08, 60% being Inter-State transfers and 80% directed towards rural households (b) Domestic remittances financed over 30% of household consumption expenditure in remittance receiving households that formed nearly 10% of rural India (c) Domestic remittance dependency was high in Bihar, Uttar Pradesh and Rajasthan and has generally grown since the 1990s, most notably in Orissa. (d) The top 25% households received around 50% of domestic remittances suggesting that remittances could be increasing source region inequality (e) 70% of domestic remittances were estimated to be channeled in the informal sector as against 25% in China revealing a huge opportunity for financial institutions to serve migrant workers (f) Kerala, Punjab and Goa accounted for over 40% of international remittance flows and are among the top remittance-dependent economies of the world.

Suggested Citation

  • Chinmay, Tumbe, 2011. "Remittances in India: Facts and Issues," MPRA Paper 29983, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29983
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    File URL: https://mpra.ub.uni-muenchen.de/29983/1/MPRA_paper_29983.pdf
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    References listed on IDEAS

    as
    1. World Bank, 2008. "The Migration and Remittances Factbook 2008," World Bank Publications, The World Bank, number 6383, September.
    2. Valerie Mueller & Abusaleh Shariff, 2011. "Preliminary Evidence On Internal Migration, Remittances, And Teen Schooling In India," Contemporary Economic Policy, Western Economic Association International, vol. 29(2), pages 207-217, April.
    3. Devesh KAPUR, 2004. "Remittances: The New Development Mantra?," G-24 Discussion Papers 29, United Nations Conference on Trade and Development.
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    Cited by:

    1. repec:spr:ijlaec:v:59:y:2016:i:3:d:10.1007_s41027-017-0065-4 is not listed on IDEAS
    2. Sridhar, Kala Seetharam, 2016. "Costs and Benefits of Urbanization: The Indian Case," ADBI Working Papers 607, Asian Development Bank Institute.
    3. de Haan, A., 2011. "Inclusive growth?," ISS Working Papers - General Series 22201, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    4. Xiaochun Li & Dianshuang Wang, 2015. "The impacts of rural–urban migrants’ remittances on the urban economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 591-603, March.
    5. Hua, Yue, 2014. "Migration Decision and Rural Income Inequality in Northwestern China," MPRA Paper 61604, University Library of Munich, Germany, revised 20 Nov 2015.
    6. Majumder, Rajarshi, 2012. "Workers on the move: migrated labour in post-reform india," MPRA Paper 44765, University Library of Munich, Germany.

    More about this item

    Keywords

    International Remittances; Domestic Remittances;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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