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Indian worker exodus from the Gulf is a chance to wean the economy off remittances
- The plunge in remittances will hurt but this is an opportunity for India to reverse its brain drain, retrain for new jobs in e-commerce and boost its infrastructure sector to create jobs, answering Modi’s call for a self-reliant India
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India’s reserve bank governor recently announced that the nation’s economy is expected to contract in 2020-2021 because of the coronavirus pandemic. This is no surprise with the country facing severe economic headwinds.
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On top of that, many Indians working abroad have lost their jobs, particularly in the Gulf states, which will strongly affect remittances.
India is the world’s largest source of migrant workers, and almost 8.5 million are based in the Gulf. The World Bank expects remittances to India to drop by 23 per cent, from US$83 billion last year to US$64 billion this year. While India has arranged for repatriation flights to evacuate some citizens from the Gulf, many others are still waiting.
What is the likely impact of the drop in remittances?
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Coronavirus: India’s migrant workers desperate to return home after lockdown
Coronavirus: India’s migrant workers desperate to return home after lockdown
First, it will put a huge strain on the exchequer when the government is already allocating additional resources to fight Covid-19. Remittances from the Gulf account for almost 55 per cent of the total to India.
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