Remittances to India may be made easier
MAHUA VENKATESH, Financial Express
November 09, 2006
NEW DELHI, NOV 8: The finance ministry may review the current ceiling on inbound remittances as part of a move to bring about a comprehensive policy on the issue.
The need for such an exercise has been necessitated with the top players urging the government to remove the present restrictions. The move comes at a time when inbound remittances are at an all time high. The remittance business is growing at 20% annually.
Company like Western Union has already indicated to the government that clarity and transparency are the need of the hour, while restrictions on transaction limit and the ceiling on the number of transactions in a year should be removed. At present, an individual is not allowed to remit more than $2,500 per transaction and is also restricted from having more than 12 transactions a year.Western Union managing director (South Asia) Anil Kapur said the government should look at bringing out a negative list to control moneylaundering.
“Restrictions would not help in any way, what we require is a negative list to address the moneylaundering issue,” Kapur said.
India received the highest inbound remittance estimated at $23 billion in 2005-06, while China received $21 billion. In 2004-05, China received $20 billion and India received $18 billion.
Interestingly, India received the highest inbound remittances with only 22 million non-resident Indians, while there are about 40 million Chinese residing outside China. Kapur said this was primarily due to the social and family structure in India.
“The number of Indians going abroad is increasing every year and the money coming into the country in the form of remittances is also swelling,” MoneyGram International country manager Harsh Lambah said, adding the industry is all set to witness further growth. As per an estimate, about half a million Indians migrate annually.
Kapur also said this industry needs to be more organised as it would directly add to the foreign exchange kitty. Remittances are high in all the southern states, apart from a few in the north like Punjab.