Remittance
- February 12, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Remittance
Subject: Economy
Context: THE raids on the office of online news platform NewsClick and residences of its directors by the Enforcement Directorate (ED) continued for third day w.r.t. remittance cases
Concept:
- It is linked with the foreign remittances allegedly totaling Rs 30.51 crore. This includes a remittance classified as FDI of Rs 9.59 crore from April 2018, and another of Rs 20.92 crore, which has been shown as receipts for “export of services”.
About remittances:
- A remittance is a payment of money that is transferred to another party. However today term is used today for money sent by someone working abroad to his or her family back home.
- Remittances represent one of the largest sources of income for people in low-income and developing nations, often exceeding direct investment and international development assistance.
- Remittances are part of private transfer payment under net transfers which in turn is considered “invisibles” under current account in Balance of Payment.
Role of remittances:
- At the macro level, remittances contribute to maintaining stable foreign reserves.
- On a micro level, remittances have shown a positive impact on healthcare, entrepreneurship, education, and overall economic development of the recipient families.
India and remittances:
- In 2019, India is estimated to have received $83.1 billion in remittances from people working overseas, about 12% of the total expected global inflow making it one of the largest recipients of remittances.
- International remittances in 2018 (2020 report) reached $689 billion, out of which India received $78.6 billion from the 17.5 million living abroad.