Outward remittances on the rise: RBI

There has been a sharp rise in the outward remittances by resident individuals over the last couple of years, according to the data available with the Reserve Bank of India (RBI).

The outward remittances for different reasons such as buying shares, property in a foreign country, making deposits or donations as also education and tours and travels overseas stood at $431 million in the first six months of the current financial year against $440.5 million during the whole 2007-08, the RBI data revealed.

The RBI had introduced 'Liberalised Remittance Scheme' in February 2004 to facilitate resident individuals to freely remit up to $25,000 per calender year.

Subsequently, the apex bank, in phases, increased the amount that could be remitted. Presently, individuals are allowed to remit upto $2,00,000 per financial year for any permitted current or capital account transactions.

The response to the scheme in the initial years was poor with only $9.6 million remitted during 2004-05 and $25 million remitted during 2005-06. The remittances went up marginally to $72.8 million in 2006-07 and sharply higher at $440.5 million in 2007-08.

In the current financial year, the remittances between April and September stands at $431 million of which $233 million was on account of "others" category as per the RBI data. The "others" includes items such as education, tours and travels.