Skip to main content

Comparing the contribution of FDI and Migrants to the Indian Economy

Indian migrants sent $62.7 billion in FY 16-17 

Recent news reports indicated that the FDI inflows in India hit a new high of $43 billion in the year 2016-17. The ministry of commerce and industry said in a press statement, “The intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country”. FDI inflows being an important metric for evaluation of economic development of the country, generates a lot of interest in the Government and the industry alike. In comparison to FDI inflows, remittance inflows to India have been $62.7 billion in FY16-17 as per the latest World Bank reports. Close to 16 Million Indian migrants, who send remittances and play a crucial role in India’s macro and micro economic development, are often shrugged off and mistreated.

Indian migrants face multiple problems at various stages which are further complicated by involvement of middle-men, corruption and lack of policies for Migrant welfare. Getting passports for them is similar to cracking an entrance exam to apply for a job abroad. Majority of Indian migrant workers are illiterate, blue-collared employees who travel abroad to earn a living and send money home to their families. They travel with one bag, slippers and a dream to deliver a better quality of life for their family back home. Unfortunately, they are not only harassed by recruitment agencies which deceive them with overpriced visas but also by customs. The government policies must take care of these blue-collared workers by easing the process of securing passports and Visas, for they contribute a large chunk of the total inward remittance market. The international remittance industry is gradually evolving by becoming conscious to the needs of these migrants and is doing its bit to ease the process of sending money home to their families.


Popular posts from this blog

Is UPI being preferred over prepaid instruments (PPIs) for peer to peer payments in India?

As per the recent news report, aggregate value of transactions made through United payments interface (UPI) during May 1st –May 28th had a higher growth rate, than transactions made through mobile wallets and other prepaid payment instruments. The aggregate value of transactions between May 1st and May 28th was Rs 2450 crore, which is 11.42 % higher than the transaction value in April. At the same time, the transactions through PPI stood at Rs 2280 growing at a rate of a modest 2.1 % over the April value. Additionally, the number of transactions from UPI channel was 8.2 million as compared to 82.7 million transactions made through PPIs.

The numbers suggest  that UPI is increasingly being used for peer-to-peer transactions for a higher average ticket-size of about Rs 2988. On the other hand, average ticket size for PPIs stands at Rs 276 for both peer-to peer and merchant payments. Mobile wallets in India being semi-closed, users generally load the wallet up to the extent of their usage…

The Internet of Mobile Money

TerraPay is a global, B2B mobile switch.

Which sounds, perhaps, like a technological solution.

But our vision has always been that technology (while best in class) is necessary, but far from sufficient - because of the need to ensure compliance, transparency and user value. TerraPay has embraced this philosophy from its inception, by investing it its own regulatory footprint. Unusual for a two year old company.

Leveraging its ‘boots-on-the-ground’ approach, TerraPay seeks to be to mobile money payments, what MS-DOS was to the hardware era. A unifier. A driver of compatibility. Which is why we term our solution ‘Interoperability as a service’.

One crucial similarity, to further the MS-DOS analogy above, is that TerraPay seeks to be the market-elected solution (i.e. not one merely driven by legislative pronouncement) to unlock the value of the disparate closed-loop ecosystems. As such, TerraPay is keenly aligned, from the very get-go, to building a solution which is robust, scalable, a…

Payment Schemes - 1

The way people pay for things is rapidly changing. Fintech start-ups have been quick to identify pain points in traditional payment systems, which, so far, have been interbank clearing and settlement systems, or those run by the various card associations. Here’s a first of a series of quick primers on payment schemes.
What is a payment? A payment is a message. Unlike your typical WhatsApp message, however, a payment instruction comes with obligations - it obliges (at least) one financial institution to debit one account (a financial instrument) and credit another.
This is what happens if Alice pays Bob, both of whom hold accounts at the same bank. Alice instructs her bank to debit her account and credit Bob’s account. When the bank gets the message, it verifies that Alice and Bob both have accounts with it, that both accounts are active, that Alice has enough funds in her account to do the transaction, and that there are no regulations that may disallow the payment. The bank authentic…