REMITTANCE BY NRI

According to media reports, Indians abroad have sent a sum of ₹ 5.62 lakh crore to their mother country during 2018. It is interesting to see that we are on top in foreign remittance followed by China and Mexico. Most of these money has come from United States, followed by UAE and Saudi Arabia.

While the GDP in 2018-19 is ₹ 140.78 lakh crore this remittance become about 4% of the GDP. Under no parameters this is a negligible amount. This huge foreign money  receipt by the government is with neither any investment nor any effort. What the government ought to do is to circulate an equal amount of rupee within the country. In short, if the government can circulate rupee internally in a systematic manner they can have foreign money correspondingly. If our financial experts can apply this theory effectively the government can multiply the foreign money receipt to any extent. No any investment and no any sweating by government. The people will play with their own money.

This huge NRI receipt in India is not spent in a reproductive manner. About 60% is spent for family maintenance, 20% is deposited in banks, 8% for acquiring landed property and shares and the remaining ,12% is spent for purchase of gold and investment for productive and non productive purposes. It can be presumed, therefore, that the government do not have any laid down policy for the effective management of this money. If this money can be properly channelised, it can very well be used to multiply the receipt. The best way will be setting up of 100% export oriented units across the country. If the government can provide basic assistance in a clean manner we can capture a good number of countries across the world. Parallelly we can also think of setting up suitable industries in third world countries.

Of late China has made FDI in Latin American countries including Caribbean region, African and Middle East countries. We too can follow their path. This will help us to create markets for our goods in those countries and can also prouduce goods in those countries that have market in India.

We may also have to consider the fact that outputs in our basic industries have come down by 5.8%. Coal production alone has come down by 17.6% in this October than October last year..Other fall noted during the same period according to recent media reports are crude oil 5.1%, natural gas 5.7%, cement 7.7%, steel 1.6% and electricity 12.4%. We may also try to find whether some result oriented investment can be made in these sectors too.

As a whole our financial management has to be upgraded to the demanded level. More than all these we must understand that we cannot ignore our youth, the best in the world, in the development of our country.

KV George

kvgeorgein@gmail.com