An Assessment of Developmental Potential of Remittances Inflow in India

Background: Recently India has been receiving the highest amount of workers' remittances which accounts nearly three-fourth of her trade deficit. The international movements of labour and the resultant remittances have assumed significance in economic literature. Yet their full potential in the developmental task of the source country has not been studied and reaped. This paper discusses the rationale as to how migrants' remittances can play a crucial part in boosting the tempo of investment and growth in the economy.

Method: The present study is analytical and review in nature going to explain the phenomenon with the help of available data. Mostly secondary sources of data published in government reports especially RBI Occasional Papers have been used. Besides, weight of scientific arguments of the experts in their documented works was the basis to substantiate the evidences.

Results: From the analysis, it was found that India has been witnessing a steady flow of migrants' remittances. The magnitude of the unprecedented inflows constitutes the potential to spur investment and growth. It was shown that inward remittances had positive impact on wealth creation and accumulation through higher consumption and investment.

Conclusion: The study concludes that Indian diaspora and their massive remittances posses substantial growth potential. The conclusion drawn underlines the need for policy initiatives in order to maximize developmental benefits, and also hints for future research on the subject.