The Remittance Industry in India: Top Impacting Factors | Article by Ankit Agarwal Alankit | Alankit.com
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The Remittance Industry in India Top Impacting Factors

MD Article April 2023 Apr 15, 2023

An increase in international migration has boosted the flow of remittances worldwide in the last couple of decades. The importance of remittances for the Indian economy can be gauged by the fact that India has been among the world’s top 10 remittance recipient countries since the 1970s. There are different ways and levels at which remittances can impact an economy. The following are the most significant ones.

At the micro-level, remittances boost a family’s income, which leads to improved nutritional outcomes, higher spending on education, increased purchasing power, more disposable incomes, and a better standard of living.

Remittances also enable recipients to boost their investments, savings, and financial literacy, as a stable stream of overseas income can ease the credit constraints of unbanked households.

From a macro perspective, remittances increase consumption in the economy as the disposable income of families grows. This helps in pushing up the GDP growth.

Remittances also keep the foreign reserves of India stable, thereby helping the Indian rupee hold up against the US dollar and other major currencies.

It can act as insurance when the country faces macroeconomic shocks, natural disasters (floods, earthquakes), financial crises, and political upheaval, for instance. As it has been observed countless times, NRIs have relieved remittance to lend financial support to their motherland while she deals with many crises.

Remittances essentially lead to increased cash flow in India, resulting in increased purchasing power among the population. Moreover, foreign remittances from NRIs during crises also positively impact the economy while reducing poverty in developing economic growth. Remittances in the world represent one of the primary international financial resources, which sometimes exceed the flows of Foreign Direct Investment (FDI).

About The Author
Ankit Agarwal Managing Director Alankit Limited

Mr. Ankit Agarwal, the Managing Director of Alankit Limited, is a qualified Chartered Accountant and an Associate Member of the Institute of Chartered Accountants of India. Mr. Ankit Agarwal has an exceptional track record in the field of Finance, Accounting, Process Enhancement, Liaising, and Coordination, as well as Research activities.

Under the leadership of Mr. Ankit Agarwal, Alankit has become a globally recognised organisation. With more than 13 years of experience as a market analyst and visionary entrepreneur, Mr. Ankit Agarwal has led business operations across multiple sectors, from high Tech to Government and Fintech sectors.

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