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India: The Top Remittance Recipient

Context

According to a recent World Health Organization report titled “World report on the health of refugees and migrants,” India will receive USD 87 billion in remittances in 2021.

Relevance

GS Paper – 2: Important International Institutions

GS Paper – 3: Mobilization of Resources

Mains Question

Discuss how the Indian diaspora can play a positive role in India’s growth story. (150 Words)


The Document

The report is the first to provide a global review of health and migration, and it calls for immediate and coordinated action to help refugees and migrants around the world gain access to health care services that are tailored to their specific needs.

The report’s findings

  • According to the report, “about one in every eight people worldwide are migrants.” (A total of one billion migrants)
  • The total number of international migrants increased from 153 million to 281 million between 1990 and 2020.
  • Around 48 percent of international migrants are women, with 36 million being children.
  • Europe and North America hosted the most international migrants as of 2020, followed by Northern Africa and Western Asia.
  • During the first half of 2021, more than half of newly recognised refugees came from five countries:
    • CAR (Central African Republic)
    • South Sudanese
    • Arab Republic of Syria
    • Afghanistan
    • Nigeria
  • In current US dollars, the top five remittance recipients (among low- and middle-income countries) in 2021 were:
    • India: 83 billion -Remittances to India increased by 4.8 percent in 2021. (In 2020, remittances will total USD 83 billion.)
    • China: 53 billion dollars
    • Mexico: 53 billion dollars
    • Philippines: 36 billion dollars
    • Egypt: 33 billion dollars
  • The top five remittance recipients in 2021, in terms of GDP share, were smaller economies:
    • Tonga (44 percent)
    • 35 percent in Lebanon
    • 30 percent in Kyrgyzstan
    • Tajikistan has a 28% share.
    • Honduras has a 27% share.
  • Remittances have recovered strongly in most other areas, with growth of 5-10 percent in Europe and Central Asia, the Middle East and northern Africa, Southern Asia, and Sub-Saharan Africa.
  • However, excluding China, growth in Eastern Asia and the Pacific was 1.4 percent slower.

The remittances

  • A remittance is money sent to another party, typically another country.
  • Typically, the sender is an immigrant, and the recipient is a relative back home.
  • Remittances are one of the most important sources of income for people in low-income and developing countries.
  • It frequently exceeds direct investment and official development assistance
  • Remittances assist families in meeting their basic needs such as food and healthcare.
  • India is the world’s largest remittance recipient.
  • Remittances help to replenish India’s foreign exchange reserves and fund the country’s current account deficit.

Importance of Remittances

  • Remittances boost or maintain consumer spending and cushion the impact of economic hardships, such as the Covid-19 pandemic.
  • Remittances account for a sizable portion of global money movement.
  • Despite predictions that remittances would decline as a result of the Covid-19 pandemic (due in part to travel restrictions and the economic downturn), remittances proved resilient.
  • Remittances are a “important and positive” economic outcome of migration for both migrants and family and friends who remain in their home countries.
  • Remittances are now more than three times higher than official development assistance and more than 50 percent higher than foreign direct investment, excluding China.

Negative Effects of Migration

  • Skilled labour movement may result in a so-called brain drain, typically from lower-income countries, and a brain gain in higher-income countries, in a process known more broadly as brain circulation.
  • If highly skilled doctors and nurses leave lower-income countries in search of better economic opportunities, brain drain may exacerbate the availability of services such as health care.
  • An estimated 193 million migrant workers’ family members are left behind.
  • Individuals migrating to high-income countries to work as caregivers for the host population may create a care deficit for their own families, particularly children and the elderly.
  • Refugees and migrants may face discriminatory treatment or attitudes.
  • The treatment of people as outsiders because of their language, culture, appearance, or place of birth is known as xenophobia.
  • Xenophobia can expose refugees and migrants to discrimination, mistreatment, or violence in host countries, and it has serious public health consequences.
  • While much migration occurs without breaking any laws or regulations, a significant but unquantifiable number of migrants are exploited by criminal networks.
  • People smuggling and human trafficking, while legally distinct, share many similarities in how they are carried out and can be difficult to distinguish

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October 2022
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