Outward remittances towards education and travel have shown sharp rise with more students opting to study overseas and more Indians increasingly preferring to holiday abroad.
According to the Reserve Bank of India (RBI) data in the June bulletin, outward remittances during 2008-09 totalled $808 million, of which education and travel together accounted for an outflow of $436 million. Other heads under which Indians spent foreign exchange were investment in shares overseas, purchase of property, deposits, donations and gifts.
RBI data reveal outward remittances have been on the rise over the last few years with people taking the benefit of Liberalised Remittance Scheme, which was introduced in 2004.
The scheme initially allowed residents to freely remit up to $25,000 per financial year for any permitted current or capital account transaction. Currently, the scheme allows yearly remittance up to $2,00,000.
In FY2005, total remittances were worth only $9.6 million. However, the figure went up to $25 million in FY2006 and to $72.8 million in FY2007.
In the subsequent years, there was surge with outward remittances in 2007-08 spurting to $440 million and to $808 million in 08-09. Remittances towards education and travel have topped the list for the last two years. Remittances towards investment in equity\debt was worth $151 million during 08-09 followed by gifts worth $133 million and purchase of property worth $55.9 million.
