Remittance inflow picks up again

Government's efforts deserve plaudits

Published : 20 Jan 2022 09:24 PM

In the midst of the pandemic, when global economies are suffering, our expatriates are providing oxygen to our country’s economy by sending remittances. Economists and bankers said that since the first day of the new year, the government has increased cash incentive for remittances from 2 percent to 2.5 percent. 

This has had a positive effect on this index. More remittances are coming from the Middle East countries as the economy of the Middle East has recovered due to the increase in the price of fuel oil in the world market.

The government should take necessary steps to 

increase the speed at which the money can be 

remitted by the expatriates

To increase the flow of remittances, the government was providing cash incentives at the rate of 2 percent from the fiscal year 2019-20. This incentive is now paying off. Expatriates had sent all their savings at home for meeting higher demand of expenses of their families. No remittances came illegally (hundi) as everything was closed in Corona. That's why about $22 billion in remittances came in the last fiscal.

Now in order to sustain that, the government wants to augment the current cash incentive to further encourage them and discourage the hundi channel for which government loses a huge amount of revenue. We propose the government to increase the remittance incentive to four percent from the existing 2.5 percent. Government should make it count and along with and other relevant stakeholders, including the banking sector, work in a coordinated manner, then it is very likely that the inward remittance will constantly surge. The government can also take necessary steps to increase the speed at which the money can be remitted by the expatriates to their loved ones back home. Therefore, more inward remittance surge will not only help add to our foreign exchange reserves but will also enhance our balance of payments.