With remittance flows to India to increase by 2.5 percent in 2015, Kerala, that is expected to receive the largest slab, readies itself for the funds that are likely to bring in an additional Rs.3,400 crore, according to economists.
A recent World Bank report says remittance growth in India reflects improving economic prospects in the United States and continued economic resilience in the GCC countries.
According to the RBI some 35 percent of remittances to India originate in North America and another 35 percent in GCC countries. Also, the recent depreciation of the Indian rupee may have almost certainly boosted prospects in the US. Kerala however is still a remittance economy, the impact of which is reflected in household consumer expenditure, NRI deposits and realty movement.
According to an Associate Professor at the Gulati Institute of Finance, it is wishful thinking to expect all NRI deposits to be invested in Kerala and there is no point in encouraging manufacturing activity that will cause environmental pollution, as Kerala is an environmentally fragile place, This being so, rather than seeking manufacturing Kerala has to attract investment in tourism, information technology, biotechnology and education.