Outward remittances under the Reserve Bank of India’s (RBI’s) liberalised remittance scheme (LRS) continued its momentum in December, with Indians remitting over $2 billion during this period, latest data released by the central bank in its monthly bulletin showed.
In the nine-month period between April and December (FY23), remittances under this scheme have touched $19.35 billion, which is almost equal to the total amount remitted under this scheme in the whole of FY22.
In FY22, outflows under the LRS scheme at $19.61 billion was an all-time high. This was aided by overseas education and international travel.
Outflows under this scheme is expected to touch an all-time high at the end of this fiscal year (FY23), aided by the rise in international travel.
In FY21, outward remittances were badly hit as the pandemic-related restrictions shut down international travel for a long period of time. In FY21, under the scheme, India’s remittances stood at $12.68 billion, down 32.38 per cent from FY20, where remittances under LRS were $18.76 billion.
On a year-on-year (YoY) basis, outward remittances under LRS in December was up 16.61 per cent. Similarly, in the nine-month period, remittances have jumped over 40 per cent YoY.
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According to December data, international travel constituted over 50 per cent of the entire outward remittance by Indians under the scheme. Outward remittances for international travel touched $1.13 billion, up 1.28 times from the same period in 2021. In 2021, international travel was marred by Covid-related restrictions all over the world, but it slowly picked up towards the latter part of the year.
After international travel, Indians spent most on maintenance of close relatives, followed by overseas education, and gifts. According to the RBI data, in December, outward remittance by Indians under the scheme for maintenance of close relatives was $274.79 million, followed by $237.65 million overseas education, and $202.76 million for gifts
According to the LRS scheme, which was introduced in 2004, all resident individuals, including minors, are allowed to freely remit up to $250,000 per financial year for any permissible current or capital account transaction or a combination of both. Initially, the scheme was introduced with a limit of $25,000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions.