Indian workers abroad Send more money back home – Why?

India is on top of the world again. The latest World Bank Report on Global Remittances and Migration states that India has received again the largest amount of N.R.I. remittances among all the countries of the world. During the year 2011 Indian workers abroad have sent home a record breaking 58 billion dollars, which at the current exchange rate amounts to Rs 3,01,600 crore. In the year 2010 also India received the largest amount of N.R.I. remittances i.e. $54 billion or Rs 2,80,800 crore.

Top Five Recipients of Worker Remittances (In $ Billions)

Country 2010 2011
India 54 58
China 53 57
Mexico 22 24
Philippines 21 23
France 16 16



In fact for the last 5 years consecutively India has been on top of the world in worker remittances.

Year Indian Worker’s Remittance (Billion $)
2006 28
2007 37
2008 50
2009 49
2010 54
2011 58

India is also the largest recipient of Gulf money. In 2010 India received $30 billion or Rs 1,50,000 crores from the Gulf countries.

We must understand that N.R.I. remittances are different from N.R.I. deposits. While N.R.I. deposits are debts for the Government, on which interest is to be paid, N.R.I. remittances are non debt receipts. As such it is not burdensome on the country. N.R.I. remittances is one of the largest sources of foreign exchange for the country.

Why do N.R.I.s send?
Neither the World Bank nor the R.B.I. which publish every year reports of huge N.R.I. remittances year after year, conveniently or deliberately stop at that. They never bother to enquire as to why our workers continue to send huge amounts. I would like to answer this question.

Family system does the Magic
The simple answer to the above question is the Indian Family System. India has a strong and well knit family system. Our families have multiple responsibilities to carry out. They take care of the aged parents, educate the children, see that the daughters are properly married off and they are well settled, take care of the unemployed and physically and mentally handicapped members, donate according to their capacities to the proper running of religious institutions such as temples and mathas, where as in the U.S.A. and other western countries these responsibilities are shouldered by their national governments. In India families bear them. It is not only among Hindus, but even among Muslims and Christians. To discharge these social responsibilities, the families are bound to save by voluntarily restricting their consumption. Thus saving is in our culture. Even today India is one of the highest saving countries of the world. We save more than 30% of our G.D.P.

The Lure of Gold
The strong saving habit of the Indians is expressed in their strong appetite for Gold. The World Gold Council, a body of Gold Producers has titled its latest Report as ‘India – Heart of Gold’, published in 2010. It points out very interestingly that India is the world’s largest importer of Gold. India has, as per the Report, 11% of world’s gold stock. It has over 18,000 tons of above ground gold stocks. The World Gold Council valued it at Rs 35,67,207 crores at the then prevailing price. World Gold Council reports that during the period 2004-09 India imported 4004.8 tons of gold. It amounts to an average import of 667.5 tons per year. In the year 2011 Indian imports of gold amounted to 1000 tons. The Report also points out that over the decade (2000-10) the demand for gold increased at the rate of 13% which exceeded the G.D.P. growth rate of 6%.

It is this strong family system and the love for and the sense of responsibility towards family, that motivates the Indian workers abroad to send the huge amount of money year after year.

Look at the mess that the family-less western countries have fallen into, on account of unrestricted consumption, negative saving and reckless borrowing!

Wisdom lies in strengthening our family system and thereby strengthening our economy.

Family is neglected by Universities
However strangely enough books on Indian Economics at the U.G. as well as P.G. levels, never acknowledge Families as strong economic institutions, in generating huge savings and making Indian Economy to a great extent financially stable and self reliant. The books on Indian Economics, have totally neglected the contribution of the Indian Family System. This is a great lapse of our University education, especially in the faculties of Economics, Commerce & Management. The earlier we correct this lapse and give the family system its legitimate recognition in the education system, the better it is for the country as a whole. Will the Universities hear?

(The author is the National Co-convener, Swadeshi Jagaran Manch)