India frontrunner in remittances from abroad in third world: report

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New Delhi, April 13: India is far ahead of China and other developing countries at least on one count. It receives much more remittances from overseas resident and non-resident workers than Mexico, China, Brazil or any other nation.

According the latest Global Development Finance report prepared by the World Bank, India has received $ 17.4 billion in 2003 from the workers living and working in other countries. The amount is so huge that it is enough to pay for about four months of countries import bill.

At the exchange rate that prevailed in 2003, the inward remittances amounted to about Rs 84,000 crore, which was more than double the amount that government collected as income-tax during the financial year.

The next largest recipient of remittances was Mexico which received $14.6 billion during 2003. Philippines was at third position having received $7.9 billion during the year.

China stood at fourth place having received only $4.6 billion from non-resident Chinese working abroad. Closely following China was Pakistan which received $ 4 billion as remittances.

The actual remittances, according to the World Bank report, may be much higher as flows through informal channels, such as hawala, are not captured in the official statistics but are believed to be quite large.

Also, the report added, a significant portion of remittances as flows through formal channels are not included in the official statistics, because most countries do not insist on regular reporting of flows below certain predefined thresholds.

The total remittances, from official channels, to developing countries totalled $ 116 billion during 2003. According to recent estimates, the remittances during 2004 was estimated to have gone up by $10 billion to $ 126 billion suggesting an increase of about 8%.

This is significant taking into account the fact that remittances went up by $17 billion in 2003, reporting an increase of 17%.

Also much of the $10 billion increase witnessed during 2004 occurred in low-income countries where remittances rose by $6.7 billion. Since 2001, remittances to developing countries have increased by $ 41 billion.

Low-income countries accounted for almost half of the increase. The share of remittances going to low-income countries rising from 28% in 2001 to almost 35% in 2004.