India is expected to top the list of countries receiving remittances this year too. According to World Bank estimates, the country is expected to receive $71 billion by way of remittances in 2013 against $70 billion last year.

In India, remittances are larger than the earnings from IT exports, according to the latest issue of the World Bank’s Migration and Development Brief.

With the weakening of the Indian rupee, a surge in remittances is expected as non-resident Indians take advantage of the cheaper goods, services and assets back home.

Terming the foreign exchange inflows on account of remittances as buoyant, Soumya Kanti Ghosh, Chief Economic Adviser, State Bank of India, said the remittances will have a sobering effect on the current account deficit and support the domestic currency.

Promoth Manghat, Vice President-Global Operations, UAE Exchange said, “Fall in the rupee exchange rate and attractive interest rates on non-resident deposits have helped drive remittances to India, thereby supporting the balance of payments situation and contributing 3.7 per cent to India’s GDP.”

The report said the high cost of sending money through official channels continues to be an obstacle to the utiliaation of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home.

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Courtesy : Business Line