Kerala's economy, propped up by diaspora remittances from about two million Malayalees abroad, can expect windfall remittances to touch Rs.75,000 crore ($12.5 billion) this financial year which could form an all-time high of nearly 35 percent of its net state domestic product, migration expert S Irudayarajan says.
Irudayarajan, head of the Migration Unit of the Centre for Development Studies in the state capital, said if the rupee continues to hover at its present rates against the dollar for another two months, the magic figure of Rs.75,000 crore in remittances would be achieved, when preliminary findings of the forthcoming edition of the Kerala Migration Survey (KMS) are out, in April 2014.
The Kerala economy, in the past three decades, has received generous remittances from people from the state who work overseas. "We did the first KMS in 1998, and it was planned to be done every five years. But we undertook two additional surveys in 2007 on account of the global crisis and another one in 2011. The present survey is all set to start, latest by next month, and the preliminary findings are expected by April 2014," Irudayarajan told IANS in an interview.
In the 2011 survey, the total number of migrants from Kerala was in the range of over two million, and the total remittance was pegged at Rs.50,000 crore in the following year. The remittances in fact touched Rs.60,000 crore, Irudayarajan said.
"In 2008, one dollar fetched Rs.49. Today it stands at Rs.63.35. From our estimates, if the rupee hovers between Rs.55 and Rs.60 for another two months, then when our preliminary report comes out in April 2014, it (remittances) would touch Rs.75,000 crore," said Irudayarajan.
He added that Kerala is set for two festival seasons - Onam (the harvest festival) in September and Christmas. "We have observed that it is during these two festival periods that the remittances peak in the state. Hence Rs.75,000 crore is going to be easily achieved," Irudayarajan said.
Asked to comment on the impact the remittances will have, Irudayarajan said that on account of the massive inflow, Kerala can easily breathe easy. Remittances today account for 1.6 times the revenue receipt of the Kerala government, 6.2 times what the state gets from the centre as revenue transfer, and is more than twice the government's annual expenditure. In other words, it can meet 60% of the state's public debt.
"As of now, diaspora remittances are 31.23% of Kerala's net state domestic product, and if the remittances touch Rs.75,000 crore, then it would reach 35%, which would be an all-time high," Irudayarajan said.
The survey would be conducted in 15,000 households. For the first time, they would rely on the 2011 census. Irudayarajan's previous study found out that nearly 40% of Kerala's emigrants live in the UAE and 25% in Saudi Arabia.
"Once the preliminary findings are ready, we will be able to find out what the real situation is in Saudi Arabia and Kuwait, as new labour laws have come in. We will know if that has affected migration from here to these two countries," Irudayarajan said.