LUCKNOW: Debunking the myth of North India in general and Uttar Pradesh in particular being laggard in economic growth, a recent survey has shown that UP is now among the top five states that lead in receiving remittances.

This is a far cry from the situation hardly five years ago, when UP was not even in top 10 states in the remittances list.

This remarkable change is borne out by surveys conducted by several agencies that include Western Union, Nielsen, Muthoot Finance, UAE Exchange Group and Xpress Money.

According to a survey by Western Union and Nielsen in November last year, the average remittance to north India was approximately Rs 3 lakh per recipient from November 2013-14. This was in contrast to south India which received Rs 1.8 lakh in the same period.

According to Promoth Manghat, chief executive officer of UAE Exchange Group, a remittance and currency exchange company, the Middle East has seen a surge in the number of unskilled labourers migrating there, and “the majority of such workers are from Uttar Pradesh. Saudi Arabia is their biggest employer,” he said.

For Uttar Pradesh, migration is still a recent phenomenon whereas it began from Kerala a long time ago, feels KR Bijimon, chief general manager of Muthoot Finance Ltd. “People from the south, especially Kerala, have now gone up the ladder and landed themselves white-collared jobs. They now have bank accounts and transfer money on their own. Workers from Uttar Pradesh and other states are using services of money transfer companies more than ever before,” said Bijimon.

For 2014-15, Muthoot Finance made transactions worth $1 billion through 28 million tickets. According to Bijimon, until two years ago, the share of south India in remittances was 80-90%. “However, the north, especially UP, is clocking 40% share in remittances now,” he said, adding that this figure was hardly 20% for a long time.

Kiran Shetty, regional vice president & managing director for South Asia at Western Union said UP received virtually nothing from 1993-2003 in terms of remittance but now it is among the top five recipient states.

“It’s not that there was no migration but there was no channel to transfer money back home. Money transfer operators now offer timely and convenient services to ensure regular payments at the click of a button,” says Shetty.

Several money transfer companies, for the same reason, are looking to aggressively bolster their presence across Uttar Pradesh.

There are 13,000 branches of Western Union in UP now. This number has more than doubled since 2010.

Global money transfer company Xpress Money, which partners with public and private banks, NBFCs and single-agent locations, has built a network of 4,000 agent partners in UP, up 40% since 2012.

“For the first time, there has been a drop in the remittance inflow to south India,” said Sudhesh Giriyan, COO of Xpress Money, adding that UP is the fastest growing remittance market for the company. It plans to conduct financial literacy programmes for migratory worker in UP. According to him, over 2 lakh people migrate overseas each year for employment opportunities from UP.

The jump in remittance inflow has naturally resulted in an overall economic growth in UP as also a growth in NRI deposits in UP, said KA Babu, the retail business head at Federal Bank.

“UP stood fourth after Kerala, Tamil Nadu and Punjab in remittance inflow for the period 2014-15, a remarkable change from the past decade where it wasn’t even in top 10,” he said.

Globally, India continues to be the top the list of countries receiving remittances for the eighth year in a row. As far as the sources go, the Middle East is the region where maximum remittance to India flows from. This is followed by North America and Europe. Saudi Arabia tops the list of sender countries and is followed by UAE. Other Gulf Cooperation Council countries, Qatar, Oman, Kuwait and Bahrain complete the Middle East pie.

