Congress leader Jairam Ramesh has urged policymakers to reduce the time and cost involved in domestic remittances within India, stressing their importance for the economic well-being of many states in the east and north, including Uttar Pradesh and others. He highlighted that while remittances from abroad receive considerable attention, internal fund transfers deserve equal focus due to their large volume and significant socio-economic impact.
Why Domestic Remittances Matter
According to Ramesh, India received about USD 135 billion in international remittances in 2025, equivalent to around 3.4% of GDP, playing a crucial role in managing the country’s balance of payments. These funds also support many state economies such as Kerala.
However, domestic remittances — money sent by migrant workers from one state to another — have received relatively little attention despite their large scale. Estimates suggest that domestic remittances in India were between USD 36 billion and USD 48 billion in 2024, nearly one-third to two-fifths of overseas remittances.
Challenges in the Current System
Ramesh pointed out that domestic remittances often take more time and incur higher costs compared to international transfers. This limits the real benefits that migrant workers and their families could receive. The lack of efficient and affordable intra-country transfer mechanisms reduces the potential of these funds to stimulate local economies.
Economic Impact
Domestic remittances are particularly important for the economies of states in the eastern and northern regions of India. Migrant workers often send part of their earnings back to their home states to support families, pay for education, health, and daily expenses. Making these transactions faster and cheaper would maximize their positive impact.
Ramesh emphasized that internal remittances support livelihoods and help regional economies build resilience, especially in states that see high inter-state migration for employment opportunities.
Policy Recommendation
He stressed that it’s high time policymakers treated domestic remittances with the same seriousness as international ones. Improving financial infrastructure, enhancing digital transfer platforms, and reducing service costs were among the key measures needed to unlock the full potential of domestic remittances.
Reducing the time and costs of internal remittances, Ramesh noted, would help boost economic activity and strengthen financial inclusion across India’s states.
