Remittances to Kerala set to fallJanuary 17th, 2009 - 5:15 pm ICT by IANS
Thiruvananthapuram, Jan 17 (IANS) Kerala Finance Minister Thomas Isaac Saturday said the state is soon going to feel the heat of the economic slowdown as remittances from abroad are certain to fall in the coming months. “It is going to be a tough time on account of the fall in remittances which incidentally have been keeping the state afloat for several years,” Isaac told reporters after the meeting of the Kerala State Planning Board here.
Two million Keralites live in the Middle East and their savings have formed an important part of the state’s finances for nearly three decades.
A study conducted by the Centre for Development Studies here states that the total deposits from abroad made in the banks of Kerala ranged between Rs.34,000 crore (Rs.340 billion/$6.97 billion) to Rs.36,000 crore (Rs.360 billion/$7.38 billion) in 2007-08.
“It is too early to predict the extent of the fall in remittances, but certainly they will fall and the real impact will be visible in the next fiscal,” said Isaac.
Asked what remedial measures would be taken to tackle this, the minister said: “Wait for my budget”.
Isaac, an economist by training, will present his fourth budget next month.
In recent years, remittances from the Kerala diaspora have been about 20 percent of the state’s net state domestic product.