Kerala to study impact of ‘reverse remittance’ on economy: CM Satheesan

This is reverse remittance, he said.Satheesan said the government views the issue seriously as it has implications for liquidity and overall economic activity in the state.Money circulation is very important.

Kerala Chief Minister V D Satheesan on Wednesday voiced concern over changing migration trends among Keralites, warning that the state's economy--long supported by money sent home by expatriates working in the Gulf, could face pressure as more people move to European countries.

He also said the state government would conduct a detailed study on the impact of ''reverse remittance'' on the economy, pointing to the large outflow of money from the state through migrant workers.

Speaking at a press conference here after the cabinet meeting, the Chief Minister said foreign remittances to Kerala have traditionally come mainly from workers in Gulf countries, helping sustain household spending and the wider economy.

''Only those people who are in the Gulf are sending money to Kerala. Remittance is only from the Gulf. People are now going to the European countries and we have to consider seriously the reverse remittance,'' Satheesan said.

The Chief Minister noted that there are around four million workers from other states currently employed in Kerala and a major portion of their earnings is being sent outside the state.

''They spend only a small amount here and the rest is going out. This is reverse remittance,'' he said.

Satheesan said the government views the issue seriously as it has implications for liquidity and overall economic activity in the state.

''Money circulation is very important. If money is not there, there will be a liquidity crunch and that will affect the circulation of money,'' he said.

The Chief Minister said the government is exploring alternative measures to stimulate the economy and expressed hope that some ''dream projects'' could be announced within the next three to six months.