Introduction
Foreign workers contribute significantly to the economy of Kerala, a state in India, by sending substantial remittances back to their families. The frequency and amount of these remittances vary based on several factors such as the savings needs of the worker, proximity to banking services, and the specific financial requirements in India. This article explores the frequency of remittances and their impact on Kerala's economy.
Frequency of Monthly Remittances
According to recent data, Kerala receives approximately 18 to 22 billion dollars annually in foreign remittances, equivalent to about 14,000 crore rupees on a monthly basis. This massive inflow of foreign currency plays a crucial role in supporting the state's economy. Typically, foreign workers living abroad and those who have left their families in India tend to send money on a monthly basis. This regular flow of funds helps maintain a steady financial condition for families and sustains various economic activities in Kerala.
For example, many workers who receive salaries abroad prefer to send money monthly to their families in Kerala. This approach not only provides a consistent source of income but also reduces the stress that comes with larger, less frequent transactions. The reliability and predictability of monthly remittances are critical for meeting regular expenses like rent, education, and healthcare. Additionally, the close proximity to banking facilities in Kerala ensures that workers can easily and conveniently process these transactions.
Remittance Patterns for Business Owners
Conversely, individuals who are engaged in business activities overseas may remit funds to India as and when needed. The frequency of such remittances can be significantly more variable, depending on the specific business requirements and seasonal fluctuations in revenues. These remittances often serve specific purposes, such as financing imports, paying suppliers, or repatriating profits. This irregular pattern of remittances can be attributed to the dynamic nature of business operations and the need to address immediate financial needs at any given time.
For instance, a business owner who exports goods to India may choose to remit a significant amount of money when the company receives payment from an international client. Similarly, when there is a need to purchase raw materials or pay taxes, such remittances might be larger and less frequent. The unpredictability of these transactions means that the total monthly remittance amount may fluctuate from one period to another, making it challenging to predict the exact amount of money that will flow into India on a monthly basis.
The Impact on Kerala's Economy
The influx of remittances has a profound impact on Kerala's economy. These funds are not only essential for meeting day-to-day expenses but also play a significant role in driving various sectors of the state's economy. The consistent and substantial remittances provide a stable financial inflow that supports the state's infrastructure, education, and healthcare systems.
The state government often uses a portion of these remittances to fund developmental projects, improving the quality of life for its citizens. Moreover, the financial stability provided by these remittances encourages entrepreneurship and investment, as individuals have the confidence to pursue their business ventures. The availability of such funds also helps in alleviating poverty and reducing social inequality.
Additionally, the remittances contribute to the overall consumption levels in the state. When families can depend on regular financial support, they are more likely to spend on essential goods and services, boosting local businesses and generating additional income for the economy. This multiplier effect ensures that the benefits of remittances are not confined to a single family but ripple through the broader community.
Conclusion
The frequency and pattern of remittances sent by foreign workers to India, particularly to Kerala, are influenced by several factors including personal savings strategies, proximity to banking services, and the specific financial needs in India. While some workers opt for regular monthly remittances to provide consistent support to their families, others prefer to remit as and when required based on their business operations. Despite the variability, these funds play a vital role in sustaining the economy and improving the quality of life for millions of individuals in Kerala.
As the value of the currency continues to fluctuate, it is likely that the total amount of remittances will increase, further enhancing Kerala's economic stability and growth.