{"id":248818,"date":"2023-06-20T19:46:22","date_gmt":"2023-06-20T14:16:22","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=248818"},"modified":"2023-06-20T19:46:22","modified_gmt":"2023-06-20T14:16:22","slug":"indian-dollar-transfers-that-beat-some-goi-welfare-spends-2","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indian-dollar-transfers-that-beat-some-goi-welfare-spends-2\/","title":{"rendered":"Indian Dollar Transfers That Beat Some GOI Welfare Spends"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201c<\/strong>Indian Dollar Transfers That Beat Some GOI Welfare Spends<\/strong>\u201d <\/strong>published in The Times of India <\/strong>on 20th June <\/strong>202<\/strong>3<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3 \u2013 Indian Economy \u2013 Money and Banking<\/p>\n

News- <\/strong>The article emphasis the importance of reducing the cost of remittances.<\/p>\n

What is the news related to?<\/strong><\/h2>\n

India crossed a milestone of achieving remittances inflow of more than $100 billion<\/strong>.<\/strong> India stands first globally<\/strong> in remittances receipts with a long lead over Mexico and China.<\/strong><\/p>\n

Another remarkable achievement is reducing the cost of receiving these remittance<\/strong>s.<\/p>\n

As per the World Bank, India has reduced the simple average cost of receiving remittances in the last 10 years from around 9% to 4. 65% for a typical $200 transaction.<\/strong> Which is cheaper than the global average of 6.30%.<\/strong><\/p>\n

What are the benefits of reducing costs?<\/strong><\/h2>\n

Firstly, <\/strong>Cost saving = Higher spending power<\/p>\n

Secondly<\/strong>, it reduce the current account deficit<\/strong> and being less volatile, provide stability to inflow of forex from abroad, and more importantly, remittances provide financial lifeline<\/strong> to families and relatives back home.<\/p>\n

Thirdly<\/strong>, remittances play a significant role in poverty reduction<\/strong> and improving health and educational outcomes of the recipient households.<\/p>\n

What are the challenges in reducing costs?<\/strong><\/h2>\n

Global analysis shows that transaction fees <\/strong>are the prime contributor to the overall cost. It is typically higher, where the sender and the receiver are not able to access the formal financial system.<\/p>\n

The costs are more where the services of an agent are used<\/strong> for collection or distribution of remittances.<\/p>\n

Studies have pointed out that the frictions associated with verification, regulatory compliances, data exchange, non-interoperable tech platforms,<\/strong> and long transaction chains may cause the transaction costs to increase.<\/p>\n

How is India overcoming these challenges? <\/strong><\/h2>\n

PM Jan Dhan Yojana<\/strong> and pervasive use of direct benefit transfer<\/strong> under government programmes have been transformative in intensifying financial inclusion.<\/p>\n

Zero cost, safe and efficient money transfer through digital public infrastructure in the form of Unified Payments Interface (UPI)<\/strong> is deepening the adoption of mobile mode for transactions.<\/p>\n

Interoperable linkages like UPI-PayNow achieved by RBI and Monetary Authority of Singapore<\/strong> will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis.<\/p>\n

With the emergence of 2,000-plus startups and 20-plus unicorns<\/strong> in fintech in India in the last few years, the vibrant fintech ecosystem lays the foundation for innovative solutions and healthy competition.<\/p>\n

What is the way forward?<\/strong><\/h2>\n

Active support of other countries<\/strong> is critical to enable ease of validation, compliance and transmission.<\/p>\n

India has been taking up this matter in various forums like G20, WTO <\/strong>and with its partners in free trade agreements.<\/p>\n

Active pursuit of these strategies has delivered promising results till now and the future looks\u00a0\u00a0 India\u2019s experience and strategies surely provide a pathway forward.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cIndian Dollar Transfers That Beat Some GOI Welfare Spends\u201d published in The Times of India on 20th June 2023. Syllabus: GS3 \u2013 Indian Economy \u2013 Money and Banking News- The article emphasis the importance of reducing the cost of remittances. What is the news related to? India… Continue reading Indian Dollar Transfers That Beat Some GOI Welfare Spends<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10496],"class_list":["post-248818","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-times-of-india","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/248818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=248818"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/248818\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=248818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=248818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=248818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}