Politics India No. 1 Recipient Of Dollars From Overseas Workers

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    Archived_Member16 SPNer

    Jan 7, 2005
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    India No. 1 recipient of dollars

    from overseas workers

    Key source of finance during crisis times

    Agence France-Presse - April 4, 2010

    Remittances to India increased to $55 billion US in 2009, making the country the biggest recipient of money from overseas migrant workers, a report said Friday.

    India has been the world's top remittance earner for more than a decade and depends on the money transfers as a key source of finance along with foreign direct investment.

    The 2009 figure of $55.06 billion was up seven per cent from $51.6 billion in 2008, the Mumbai-based business daily Economic Times said, citing central bank data, and just $2 billion a year in the late 1980s.

    The increase in remittances came despite the financial crisis and global economic slowdown last year which had been expected to hit migrant labour.
    The central bank attributed the higher remittances to India being perceived as a relatively safe option during the financial crisis, a hike in interest rates on non-resident deposits and new investment products.

    China is second behind India in remittances, receiving $48 billion and Mexico is third with flows of $42.6 billion according to figures for 2008 compiled by the World Bank.

    The sharp increase in remittances to India began with the booming oil industry in the Persian Gulf in the 1980s, resulting in a migrant labour surge to the region.

    Later in the 1990s, the technology boom led to a sharp increase in information-technology professionals migrating to Europe and North America.

    Also, the central bank has steadily eased restrictions in the currency markets since 1991, almost eliminating the illegal "hawala" market for such remittances by Indians, especially from the Gulf market.

    Hawala is an informal system of money transfers under which money is moved around by agents who circumvent legal and financial barriers, primarily located in the Middle East, North Africa and South Asia.

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