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India rules the remittance chart.

INDIA has topped the global chart of remittance with a phenomenal $ 71 billion in 2013, which is nearly three times the foreign direct investment ( FDI) that flowed into the country in 2012, according to a revised World Bank forecast.

India is followed by China with $ 60 billion, and the two Asian powers together account for one- third of total remittance that flow to the developing world.

" Remittance acts as a major counter- balance when capital flow weakens as happened in the wake of the US Fed announcing its intention to reign in its liquidity injection programme.

Also, when a nation's currency weakens, inward remittance rises and as such, it acts as an automatic stabiliser," Kaushik Basu, chief economist, World Bank, said in Washington.

CAD financing

Senior economists said these remittance would help finance India's huge current account deficit and strengthen the rupee.

The Philippines with $ 26 billion, Mexico $ 22 billion, Nigeria $ 21 billion and Egypt $ 20 billion also figure in the list, released on Wednesday. Other large recipients include Pakistan, Bangladesh, Vietnam and Ukraine. As a percentage of GDP, top recipients in 2012 were Tajikistan 48 per cent, Kyrgyz Republic 31 per cent, Lesotho and Nepal 25 per cent each and Moldova 24 per cent.

" These latest estimates show the power of remittance.

For a country like Tajikistan, they constitute half the GDP. For Bangladesh, remittance provide vital protection against poverty," Basu added.

" Policymakers can do much more to maximise the positive impact of remittance by making them less costly and more productive for both the individual and the recipient country," said Dilip Ratha, manager, Migration and Remittances Team, at the Bank's Development Prospects Group.

Siva Ramkrishnan, executive director at PwC, said that India and China have been traditionally big remitters.

" Over the last six months, the rupee has depreciated. And since then, there has been a large flow of foreign currency into India as NRIs benefit from higher exchange rates.

This will help to finance the troublesome current account deficit," he added.

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Publication:Mail Today (New Delhi, India)
Geographic Code:9INDI
Date:Oct 4, 2013
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