Did you know that India is one of the largest recipients of remittances from residents abroad? Do you know how the NRI remittances are used in India? Would India’s development be hampered if the NRI funds ceased to flow in to states like Gujarat?
It is common knowledge that the Gujrati community has a strong presence across the globe. Largely a business community, Gujrati NRIs also account for a major percentage of the foreign funds sent to India. They also actively invest in Gujarat’s economy. Let’s have a look at the contribution that NRIs have made to the economy of the state of Gujarat:
There are more than 8 lakh NRI accounts in Gujarat and the total deposits in 2006 amounted to well over US$ 40 billion. Take away this and the banking system in the state is likely to shudder!
NRI remittances contribute heavily to the forex reserves of the country. Gujarat being one of the highest recipients of forex in India, its contribution in strengthening India’s foreign exchange balances cannot be undermined. Gujarat minus these reserves will be far less a glitzy place to live in and the centre may not be able to help, spelling disaster for businesses in the region and outside.
Gujarat’s Madhapar village is amongst the wealthiest in the whole of Asia – thanks to the NRI remittances from countries like USA, UK, Africa, and the Gulf. Success stories and rags to riches sagas are likely to end if NRI remittances were to stop. Stories of their success would remain just that – tales of splendor in a distant land, with none of it visible at home.
NRIs all over the world have been active in restoring peace and harmony in Gujarat. The NRI community has played a crucial role in resurrecting the economy in the aftermath of disasters like communal riots and earthquakes. 80 NRI organizations formed the ‘Promise of India’ group to address peace and development issues in India. Without the support of the NRI community, recovery from disasters could take decades.
A survey conducted by the RBI in 2006 indicates that from the total NRI funds remitted to India, around 20% was in the form of bank deposits, 13% went into real estate and equity markets each, and a mammoth 54% was spent on expenses incurred by families of the NRIs residing in India. The report also indicated that NRI remittances have also increased…which is good news if the thought of Gujarat minus its remittances sent a shiver down your spine!
Gujarat has achieved a growth rate of 11%, which is greater than the growth rate in the rest of the country and one must acknowledge the contribution of NRIs in this growth.
Would the state of the economy in Gujarat be the same irrespective of the inflow of funds from NRIs? What does the large number of families depending on NRI funds to meet their living expenses tell you about the relevance of NRI funds?
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