With admissions to foreign universities returning after a one-year lull, along with a steady normalization of overseas travel and an increase in economic activity, monthly outgoing remittances under the system of liberalized transfer (LRS) reached a record high of $ 1.96 billion in August. , according to data released by the Reserve Bank of India.
The previous record was $ 1.87 billion in August 2019. In August, data showed that “study abroad” remittances also hit a historic monthly high of $ 780 million.
Remittances for travel also hit an 18-month high of $ 574 million – the highest since February 2020, when several countries began imposing flight and travel restrictions in the wake of the outbreak. Covid. This August also saw $ 284.8 million in remittances for “maintenance” of close relatives in August 2021.
Experts say that August has traditionally seen large remittances as universities abroad start their new semester in September and students provide funds for fees, accommodation, tickets and other fees. installation.
Arijit Sanyal, managing director and CEO of HDFC Credila Financial Services, said the organization saw a sharp increase in disbursements during the month. “Last year, demand fell because of the Covid lockdowns. So this year there has been a consolidation in demand, which has led to the rise. In addition, there are new geographies that students are going to and this has led to more students coming out, ”he said.
According to Sanyal, as the United States continues to get the bulk of students, Canada and the United Kingdom have become bigger markets and there are “many other new places where more and more students are going. for education ”.
Experts claim that more Indian students have been able to gain admissions abroad due to two factors: several universities have increased their capacity following the evolution of a hybrid mode of education delivery and Indian students increased their share due to their competitiveness.
Experts in the education consulting industry say that between March and August of last year, there was uncertainty over how long Covid would persist without a breakthrough on vaccinations.
“As a result, many students have not been admitted to foreign universities. This year the numbers have increased dramatically as there is much more clarity about the vaccinations and the protection it offers, ”said a senior official at a major overseas education consultant in Hyderabad.
“The number of students going abroad increases every year and the trend remains constant, except for a jump last year because of Covid,” the official said.
With the record for remittances in August, the total for the first five months of the current fiscal year has now reached $ 6.94 billion. By comparison, remittances during the corresponding five-month period of the previous fiscal year, which was hit hard by Covid, amounted to $ 4.05 billion. For FY’21 as a whole, it was $ 12.68 billion.
The year 2019-2020 saw the highest outgoing remittances of $ 18.76 billion in any fiscal year since the introduction of the LRS in 2004.
India has seen a sharp increase in remittances over the past seven years. While outgoing LRS remittances amounted to $ 1.325 billion in fiscal year 2014-15, they jumped to $ 4.6 billion in 2015-16 and in subsequent years they rose to $ 18.76 billion in 2019-20.
Total outgoing LRS remittances since April 2014 amounted to $ 77.6 billion. While nearly $ 20 billion has been given for “study abroad”, more than $ 24 billion has been given for travel.
Under the LRS, residents are allowed to pay up to $ 250,000 in a fiscal year under various headings, including current account transactions such as travel abroad for employment, education, travel, emigration, maintenance of close relatives and medical treatment.
Residents can also transfer money for capital account transactions under the LRS, including opening foreign currency bank accounts abroad, purchasing property, and investing in units of mutual funds and venture capital funds.