KOCHI: Kerala may be known as a 'remittance economy' or the 'money order economy,' indicating its huge reliance on the large sums of money sent by expatriate Malayalees, mostly in the Gulf countries.
But, Keralites also send a big chunk of money to their relatives living abroad. As per the latest statistics, Kerala's outward remittances falling under the 'maintenance of close relatives living aboard' or 'MCR' section crossed Rs 1,500 crore during the 12 months ended March 31, 2018.
In fact, the Reserve Bank of India (RBI) figures indicate that all the states combined spent close to Rs 19,442 crore in the same period in the category of MCR. The total outward remittance from India stood at Rs 75,024 crore in the FY 2017-18. At Rs 54,085 crore in FY 16-17, outward remittances have grown by 38 per cent.
Deepesh Varma, senior VP, foreign exchange business, Thomas Cook India, said he was surprised to see the high figures under MCR in the state. Varma, who was in Kochi to announce the company's business plans in the state, added Kerala contributes to about Rs 3,000 crore to the company's annual Rs 15,000 crore business in the country.
Under the Liberalised Remittance Scheme (LRS) issued by the RBI, residents of India are allowed to remit $250,000 in a financial year for overseas education, travel, medical treatment and purchase of shares and property, apart from maintenance of relatives living abroad, gifting and donations. The remittances are allowed to be made in any freely convertible foreign currency.
Commenting on the increasing trend of outward remittance figures, Jose Sebastian, faculty, Gulati Insitute of Finance and Taxation, said the localisation of job overseas and stricter work-visa restriction have put increasing financial strain on students, resulting in more outflow of cash from their families. He added the rising trend of Indians undertaking overseas trips and higher education options are further likely to push the figures in the coming years.
Leading the list of outward remittances last year, the maximum was spent on overseas travel by Indians, at Rs 26,625 crore. Following MCR in the second place, overseas studies registered the third spot by reporting outward remittances of Rs 13,379 crore.
On the other hand, according to a World Bank report, India retained the top spot in global remittance with over Rs 4,56,780 crore flowing into the country last year. The NRI deposits in India averaged $126 billion last FY, recording a positive inflow of about Rs 62,890 crore compared to the previous year.