Thiruvananthapuram, June 27 (IANS) The free fall of rupee against the dollar is proving to be a windfall for Kerala's 2.5 million diaspora based mostly in the Middle East and the US.
Commercial banks in the state and families of the non-resident Keralites are in a upbeat mood as the rupee got to its lowest level of sub-Rs.60 to a dollar.
Eighty-five year-old P.T.Thomas, who for 40 years worked in Bahrain and returned home in 1995, said the rupee depreciation would be a huge bonus for expatriates.
"When I reached Bahrain in 1955, the legal tender there was the Indian rupee and by paying Rs.3.50 you could get one US dollar. In 1971, the Bahrain dinar was the legal tender and then one dinar fetched Rs.10 and today it has shot up to Rs.161. It's these upward swings in the currency market that brings extra cheer and I myself have experienced it and benefitted too," Thomas told IANS.
A leading banker said that whenever the rupee gets weak, there is increased activity as more and more of the diaspora from the Middle East start sending more money and this time too it has been no different.
"We are being told that many in the Middle East are now making best use of this present situation and are drawing money from their credit cards and sending to banks here as deposits," the banker told this correspondent.
The non-resident Keralites' deposits, according to the latest State Level Bankers Committee, has crossed Rs.66,000 crore as on March 31.
"If you ask me, it should touch Rs.100 (to a dollar)," said S. Irudayarajan, who heads the migration unit at the Centre for Development Studies here and someone who has conducted studies on the diaspora community both in the state and by visiting labour camps in the Middle-East.
Irudayarajan's studies have found that nearly 40 per cent of Kerala's emigrants live in the UAE and 25 per cent in Saudi Arabia.
The latest findings on the diaspora have revealed that diaspora remittances are 31.23 per cent of the Kerala's net state domestic product and since the 1970s, the state economy has by and large been propped up by the diaspora remittances.
Remittances are 1.6 times the revenue receipt of the Kerala government, 6.2 times what the state gets from the centre as revenue transfer, and is more than twice the government's annual expenditure. In other words, it is more than 60 per cent of the state's public debt.
The fall in the value of the rupee has brought cheer to exporters too. Spices like pepper and cardamom have logged a rise in export volume.
But the happiest are the consumer goods companies as the inflow is fuelling the state's consumption expenditure. Kerala is today one of the largest markets for luxury cars, jewellery and diamonds, expensive home appliances and electronic gadgets.