India not to be hit by lower remittances from Gulf region: Moody's

The report analyses potential credit implications for remittance reliant Asian economies - Bangladesh, India, Pakistan, the Philippines, Sri Lanka and Vietnam - where remittances form a sizeable portion of foreign reserves


India unlike many other economies in the Asia Pacific region may not be hit majorly by lower remittances from the Gulf Cooperation Council (GCC) region following slump in oil prices, credit rating agency Moody's Investors Service has said.
In a report titled `Falling Remittances from the Gulf Dampen Benefits of Lower Oil Prices', Moody's said a more pronounced and prolonged oil price decline, coupled with fiscal tightening in many oil exporting countries, is likely to hurt migrant worker earnings and remittances.
The report analyses potential credit implications for remittance reliant Asian economies - Bangladesh, India, Pakistan, the Philippines, Sri Lanka and Vietnam - where remittances form a sizeable portion of foreign reserves.
"For India, the Philippines and Vietnam, diversified locations and vocations of overseas migrants could help to reduce the fall in worker remittances," the report said.
According to Moody's, 15.9 percent of remittances into India are from the US and this may go up further if the US recovery gathers steam.
Further, given India's larger net oil import bill, it can witstand a much greater fall in remittances, Moody's added.
According to Moody's report, when oil prices rise, worker remittances increase significantly.
"For instance, between 1999 and 2008, when oil prices increased by over 24 percent annually, remittance outflows from the GCC rose by close to 10 percent, outpacing outflows from the US, the second-largest remittance source country," the report said.
According to the report, the relatively diverse occupations of their workers overseas should provide a buffer against an oil-related slowdown in remittances for India and the Philippines.
For countries facing external pressures or weakening of economic growth, a slowdown in remittance will exacerbate such pressures.
"Sri Lanka stands out in this regard, with Bangladesh and Pakistan following. India and the Philippines are among the top five remittance recipients globally in dollar terms, but are more resilient to the slowdown because of other buffers, both domestic and external," Moody's said.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


Food Inflation

Combined food inflation declined to 5.52% in February 2016, compared to 6.66% recorded for January 2016. For rural and urban areas, food inflation in February was 6.11% and 4.37%, respectively. Vegetable prices increased by 0.70% in February compared to those prevailing in January 2016. Inflation in fruit prices was -0.72% in February, while pulses were dearer by 38.30% y-o-y. Inflation for cereals stood at 2.18% and inflation for milk products was 4%. Price rise of non-vegetarian items, such as meat and fish, was 7.19% in February compared to 8.23% in January 2016.


Will the Banking System Collapse?
This is a topic which nobody discusses, or cares about, except a few; even there things don’t move beyond discussions. This concern is about our millions of middle-class elderly senior citizens in India, whose children do not, or cannot, support them. They cannot invest their lifetime savings in businesses or stock market and are not in a position to start, or run, a small business themselves. They don’t want to take any risk at an older age. 
In such a scenario, the only option left for this category is to invest their money as bank fixed deposits (FDs). Now, this helpless category has so much of worrying to do. If not consciously (but subconsciously), they worry about their deteriorating health, fear of death, fear of losing their partner, loneliness, daily routine work, etc; above all, they worry about the cost of living which is going up day by day and their bank FD rates going down day by day! 
I will be grateful to Moneylife if it can research and let us know if a collapse happens in the US or Europe, will our Indian banks also fall along with them like a pack of cards? Is our hard-earned money, which is the only support we have and which is just enough for our daily food and medicines, will also be snatched from us? Don’t you think this is cruel on the part of the government, politicians, corporates, policy-makers, intellectuals and the media to allow these greedy bankers to silently, or ignorantly, mass murder millions of middle-class senior citizens and not give them a chance to even die in peace?
Moneylife and its team will receive huge blessings and good wishes from millions of helpless senior citizens for taking up this cause and bringing some solace to our elderly.
Omar SK, by email 
This is with regard to “Private Bankers Are Public Servants, Decrees the SC” by Sucheta Dalal. This is yet another occasion when one feels proud of being part of the efforts that Moneylife makes to spread awareness about the implications of legal decisions affecting the financial sector. The judicial process and the law books passed on to us by the British have not, even after several decades of legislative action, undergone the kind of Indianisation needed to serve a growing economy like ours. 
If the common man has to benefit from the several provisions of law intended to protect his interests, there has to be more transparency and speed in judicial procedures. In most of the court cases affecting financial interests of citizens, the legal battle is between the citizen on the one side and government/corporate body on the other side. Governments and corporates can fight endlessly using public funds (yes, for me, the funds with corporates also come under the broad classification ‘public funds’). These result in prolonged litigation and, sometimes, even small issues reach the Supreme Court. 
The differentiation between the public sector and private sector banks for enforcement of laws like the Prevention of Corruption Act, by itself, does not stand to reason. Both categories of banks in India mobilise resource from the same source (public deposits) and do business in similar areas/sectors.
MG Warrier, online comment



This is with regard to “Why Savers Have Stayed Away from Stocks for Two Decades” by Sucheta Dalal. The question now is how will somebody convince investors that the stock market is a good place to grow one’s wealth? Most people ‘invest’ in insurance products because there are agents to lure them. An equity-investment culture can be created only if youngsters are financially educated. If that happens, the next generation will change things. It may now be difficult to convince older market-sceptics, especially those who may have lost money to scams and IPOs (initial public offers) that never did well.
Mohan Sivanand, online comment


This is with regard to “Salt Restriction Myth Busted” by Prof BM Hegde. Refined salt may be harmful but the best salt is natural, unrefined and unprocessed salt from the sea. It is a nutritious food. Among the many minerals that make sea-salt nutritious are: magnesium, manganese, boron, copper, silicon, iron and nickel. It has all the trace mineral elements that are naturally found in our blood.
Just take a cue; five decades ago did anyone have an issue of salt intake? The answer is No, because we used to ingest natural salt and sweetener like jaggery. The only issue is now to find good organic material at reasonable price.
Jayendra Pandya, online comment


This is with regard to “Which Critical Illness Policy?” by Raj Pradhan. This is one of the better written articles on critical illness (CI) cover. Can you also suggest a flowchart to aid decision-making on which product type would be better for a layman?
Anurag, online comment



This is with regard to review of ‘The Turn of the Tortoise’ by Debashis Basu. As we are being reminded about this by the right-wing RSS, BJP and Shiv Sena, the lack of development can be blamed on the minorities. Once pure Hindutva is implemented, all these problems will be automatically solved.
J Pinto, online comment


This is with regard to “Buying Quality Vs Paying Less” by Debashis Basu. This is very well written. I have been investing in high-quality companies and nothing captures the essence of growth-investing as this article did. Growth-investing is a very tough field and has humbled quite a few people. But, on the flip side, you get to think like a businessman. I almost put myself in the promoter’s shoes when I think of the potential of the businesses.
Prashant Rishi 


This is with regard to “Investing to Retire Comfortably” by Jason Monteiro. This is a well-written article. I think the problem is something else. Each government can come and change the taxation rules for this corpus whenever it wants. It is our money until we get our hands on it. In the US (and even in Europe), when Detroit’s local government goes bankrupt, the retirement/ pensions funds are ‘marked down’. My fear is that when India goes through a bad phase in future, the government would use these pension funds the way it uses LIC (Life Insurance Corporation of India) to save the stock market or worse mark-it-down-to-their-whim.
Aditya Kumar Pandey


This is with regard to “I’m Back!” by Debashis Basu and Jason Monteiro. I wish the authors had mentioned the ugly role played by the Opposition politicians, i.e., the ‘dynasty slaves’, plus the new crook on the block and his coterie of Leftists, ably aided by their Left allies and Pak-leaning media. A large part of the blame should fall on these crooks who have just a one-point agenda: to pull down Narendra Modi and nothing else. They have failed to play the role of an intelligent, honest Opposition. And now it looks like the Opposition is willing to go anti-India desh ki barbaadi tak way to destroy Mr Modi. This reminds me of the joke: “Every woman needs a husband because you can’t blame everything on God or Modi.” The article does not have even a reference to any of these Opposition anti-nationals.  
Anand Vaidya



This is with regard to “Wealth Creators 2005—2015” by Jason Monteiro and Pratibha Kamath. Great analysis, the past two decades were the turning point for our economy and it was because of the reforms in 1993. I doubt if there are any winners (for tomorrow) that are available cheap?
Sudharshan Katipally


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