NRI remittances stay strong, but end-use a concern: Shetty

THIRUVANANTHAPURAM: After four decades of unabated NRI remittances into the country, the funds inflow remains as strong as ever despite the downturn. But the end-use of the money and long-term prospects of inflows from the Gulf region should be a matter of concern, according to Y Sudhir Kumar Shetty, COO (global operations) of Abu Dhabi-based international money transfer house, UAE Exchange Center.

���Despite the global economic slowdown, remittance inflows have been healthy even in these times but it would be good to ask ourselves the question, where has all the money remitted over the past four decades gone?��� Mr Shetty told ET.

He said the period 2004-06 was one of exceptional growth when there was a 34% year-on-year growth in remittances. ���That has dropped to levels of about 22-25%, which is still healthy by any standards considering that even a 15% growth would be considered robust in normal times���, Mr Shetty said.

Far more than the vigour of remittance inflows, he said the concern ought to be about the end-use of funds as well as long-term prospects of funds coming in. ���To mention just one obstacle for remittances going into investments in India, there is the power shortage in the country. To compete globally, quality power availability is a basic necessity���, he said.

UAE Exchange, which has positioned itself as one of the leading exchange houses in the Middle East and focuses primarily on money transfers and exchange, has seen growth of 34% and 24% respectively in number of transactions and volume of money remitted in the first half this fiscal.

Mr Shetty said there was every indication that the Middle East was on the path to achieving the developed-country status in the foreseeable future, and that it would mean jobs that Indian expats currently held may not stay for long. ���In the services sector Indian expats are fast losing out to other nationalities like South Africans, East Europeans and Nepalis, to name a few���, he said.

Another concern is the frittering away of remittances, he says. ���Expats with poor education levels working in the Gulf often prove to be poor managers of the funds they send home. Children of many of them do not even pass Class 10 despite all the financial support they get���, he said.