After a one-year COVID-triggered hiatus, outward travel from India is back with a bang. Admissions to foreign universities are on in full swing, and business and leisure travel is inching back to normal.
In line with this, monthly outward remittances under the Liberalised Remittance Scheme (LRS) crossed a record $1.96 billion in August, revealed data published by the Reserve Bank of India (RBI). Remittances originating under the ‘study abroad’ category hit a record high of $780 million, said reports.
The earlier record for monthly remittance was set in August 2019, at $1.87 billion. It may be noted that outward remittance typically peaks in August, when universities abroad begin the fall semester. Students pay not only the term fees but also cautionary deposit for rental accommodation, flight tickets and other expenses.
Citing Arijit Sanyal, MD and CEO, HDFC Credila Financial Services, an Indian Express report said this year’s admissions to foreign universities were high due to pent-up demand as well. Except for some who opted for online classes, most student deferred their education abroad plans due to COVID last year. They, along with this year’s students, headed to their universities overseas, and in-campus classes, this year.
The US retains the spot as the top student magnet, but Canada and the UK are also drawing them in sizeable numbers, the report further said.
With the abating of the second wave of COVID, and resultant easing of travel curbs, remittances for travel also reached an 18-month high in August at $574 million, said the IE report. The earlier record amount was seen in February 2020, when the pandemic began to take root worldwide. Of the total travel remittance in August this year, $284.8 million was categorised as ‘maintenance’ of close relatives.
The report noted that under the LRS, resident individuals can remit a maximum of $250,000 in a financial year under various heads. These include current account transactions such as going abroad for education, job, travel or emigration. It also covers ‘maintenance’ of close relatives and medical treatment.
As outward remittances hit a high in August, the total remittance in the first five months of the current fiscal went up to $6.94 billion, vis-à-vis $4.05 billion in the previous year period (April-August 2020). For the full fiscal year ended March 2021, the remittances stood at $12.68 billion, said the report.
LRS was first introduced in 2004, and 2019-20 saw the highest outward remittance, at $18.76 billion.