![]() LRS acts as the guidelines for external remittances from India. To streamline outward payments, the Reserve Bank of India (RBI), based on Tarapore committee’s recommendations, launched the Liberalized Remittance Scheme (LRS) in 2004. Transferring money to people or organizations in foreign countries was time-consuming and laborious in the past. What is the Liberalized Remittance Scheme (LRS)? The Reserve Bank of India publishes data on outward remittances under the LRS scheme in its monthly bulletin. In today’s story, we look at the outward flow of remittances from India and associated causes and trends. On the other hand, outward remittances from any country could be for multiple reasons such as education, travel & tourism, or other purposes. Therefore, it becomes utmost important to streamline and ease the remittance transfers through official channels. Both demand side and supply side of remittances must be strengthened to productively utilize the remittance flows. Governments tend to provide incentives to boost remittance flows and direct them to productive purposes. Remittances are one of the stable sources of external fund flows. Migrants may have to make big sacrifices-like leaving behind their families-and take risks, sometimes even face abuses when looking for a job and residence. Furthermore, remittances have significant human costs. However, it is difficult to estimate the precise magnitude of remittance flows given many transactions take place through informal channels. As per the migration data portal, remittances in 2022 is expected to grow by 4.2% to reach 630 billion USD. They shield against unanticipated emergencies and often function as investment support for education and infrastructure. ![]() Inward Remittances are significant for low- and middle-income countries. Remittances are transfers, usually sent from one individual or family of migrants working in one country to another individual or family, residing in their country of origin. Remittances for the purpose of investments & purchase of immovable property are also increasing. Data from the RBI shows that more than 50% of the Outward Remittances from India are for Travel & Education. ![]() ![]()
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