As many major economies are destined to slip into recession this year, Indians living in those countries are also likely to send far less money back home. In India, remittances are projected to fall by about 23 per cent to USD 64 billion in 2020, compared to a growth rate of 5.5 per cent and receipts of USD 83 billion in 2019, according to a World Bank report. The effect of coronavirus is expected to be visible in the form of global slowdown and travel restrictions, which will also affect migratory movements, keeping remittances subdued even in 2021, the report added.
With over 10 crore internal migrants, many Indian states are set to face a hit on the internal remittances front as well. Many people from the poorer sections of the population, especially from underdeveloped rural areas, migrate to urban economic centers in the search of an escape from poverty and unemployment. Remittances from these migrants, though in smaller amounts than those from international migrants, serve as a lifeline and insurance for families left behind.
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The severe fall in crude oil prices is also likely to hit India’s remittances as many Indians work in the oil-producing nations and fall in their businesses will mean less income for the Indians too. “Struggling oil economies will also imply India’s remittances could fall sharply in the coming months and quarters as well,” Madhavi, Economist, Edelweiss, told Financial Express Online.
However, the remittances are expected to fall from almost all the countries due to the coronavirus-led recession, Sameer Narang, Chief Economist, Bank of Baroda, told Financial Express Online. Meanwhile, the lockdown in India has impacted the livelihoods of nearly 4 crore people in India, out of which, nearly 50,000–60,000 have moved from urban centers to rural areas in the span of a few days.