Outward remittances of education, travel on the rise

MUMBAI: Outward remittances towards education and travel have shown sharp rise with more students opting to study overseas and neo rich Indians increasingly preferring to holiday abroad.

According to the Reserve Bank data mentioned in the June bulletin, outward remittances during 2008\09 totalled USD 808 million of which education and travel together accounted for outgo of USD 436 million.

Other heads under which Indians spent foreign exchange were investment in shares in foreign countries, purchase of property, deposits, donations and gifts.

RBI data reveals 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 upto USD 25,000 per financial year for any permitted current or capital account transaction. Currently, the scheme allows yearly remittance upto USD 2,00,000.

During 2004\05, total remittances were worth only USD 9.6 million. However, the figure went up to USD 25 million in 2005\06 and to USD 72.8 million in 2006\07.

In the subsequent years, there was sharp rise with outward remittances in 2007\08 spurting to USD 440 million and to USD 808 million during 08\09. Remittances towards education and travel have topped the list for the last two years.

Remittances towards investment in equity\debt was worth USD 151 million during 08\09 followed by gifts worth USD 133 million and purchase of property worth USD 55.9 million.