Analysis on driving forces of remittance inflow of home country: Evidence from India / Aini Syuhada Noradi

Remittances have played an increasingly large role in the economies of small and developing countries since the late 1990's. In 2015, India is one of the countries that received largest share of remittances. Remittances generally can lead to higher human capital accumulation and reduce the level and severity of poverty of country. A better result in the remittance inflow of a country can be seen when the determinants are being well-specified and significant. India, the largest remittance-receiving country worldwide, witnessed a near 9% drop in non-resident Indian (NRI) pay inflows to $62.7 billion in 2016 over the previous year, as stated in a World Bank report 2016. Much of this shortfall has been attributed to the economic downturn in Gulf Corporation Council (GCC) states. Thus, it is crucial to identify the contributing factors towards this issue of remittance in India. Problem arises from a slump of economic condition in India seems to give a declining trend in India's remittance inflow for 2002, 2003, 2008, 2013 and 2015. Therefore, a study regarding to this issues will be conducted in order to analyse whether the drop of remittances inflow that arises in India were also derived by other factors. This study which aim to examine the driving forces of remittance inflow will allow a strategic approach to be adopted in improving economic development and reducing level of poverty.