Kerala braces for drop in remittances

A view of the Dubai skyline. (pic for representation only)

Two months after India retained top spot as the largest recipient of remittances, Kerala, a key contributor, is staring at a potential downturn.

According to the World Bank’s latest Migration and Development Brief, India receives $ 69 billion in remittances.

Conservative estimates put the state’s share in the national remittances at about 40%.

As concerns emerge over return emigration triggered by a loss of jobs in the Gulf countries, the state’s long-standing Gulf connection could be in for some strain.

In 2016, the state-funded Kerala Migration Survey (KMS), conducted by the Thiruvananthapuram-based Centre for Development Studies (CDS), showed the number of emigrants from Kerala as 2.27 million, marking a crucial drop from the 2014 figure of 2.4 million and even the 2011 figure of 2.28 million.

Even as results of KMS 2017-18 are awaited, early projections point to a possible drop in the number.

S Irudayarajan, a professor at CDS who conducts the survey, said the 2017-18 figures would be firmed up by September and there was a possibility of the number dropping further.

“Return migration from the Gulf is going to be a key factor. Both the number of emigrants and remittances are likely to come down,” he told DH.

The KMS 2016 recorded a fall – compared to 2011 – in the number of emigrants from Kerala in the Gulf Cooperation Council countries barring UAE (41.5% of Kerala’s emigrant population) and Qatar (8.4%).

It showed a slight increase in emigration to the US and Canada. The survey cited Kerala’s ageing population among reasons for the falling numbers.

After the global economic crisis, wages in the Gulf have not increased substantially and it was no longer profitable for emigrants from Kerala to work in the Gulf countries, the survey had concluded.

Keralites were also using their Gulf experience to move to English-speaking countries like the US, UK and Canada for permanent residence.

According to a paper on the dynamics of emigration and remittances in Kerala, by Prof K C Zachariah and Prof Irudayarajan, remittances in 2014 were 36.3% of the state’s net domestic product.

With estimated annual remittances of about Rs 90,000 crore, Kerala proposes to have emigrants as partners in infrastructure development in the state.

Traditionally, land and gold have accounted for most of the emigrants’ investment in the state. In August, the CPM-led state government will roll out the Pravasi Chit Fund in the UAE as part of fund mobilisation for infrastructure projects.

The NRI deposits in the state, as in June 2017, stood at Rs 154,252 crore. Economists and migration experts are awaiting updated figures to further establish projections.

“The remittance figures could not always be a true indicator because a spike could also mean that people who are returning after leaving overseas jobs are depositing their savings,” Prof Irudayarajan said.

From a sociological perspective, it could take a few years to assess the impact of these trends and projections where internal or replacement emigration also becomes crucial.

“The number of people in the emigration-prone age group (20-34) is also coming down. So in the Kerala context, it’s also a demographic problem,” he said.

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Kerala braces for drop in remittances

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