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KOCHI: Consequent on the exchange rate liberalisation of the early nineties, remittances to the country from abroad have spurted handsomely.

Taking a case study of Kerala, the Centre for Development Studies, Thruvananthapuram, has shown that remittances have grown over 10-fold (over 1,000 per cent) after the exchange rate liberalisation during the early part of the last decade.

The progressive exchange rate liberalisation, which was ushered in during 1991, resulted in a floating though a managed exchange rate from the fixed exchange rate, which had been prevailing earlier. The report, Kerala's Gulf Connection: Emigration, Remittances and their Economic Impact, by Mr K.P. Kannan and Mr K.S. Hari found that remittances from NRIs to Kerala had spurted from Rs 1,239.93 crore in 1989-90 to Rs 14,157 crore in 1999-2000.

The report also found that the illegal hawala route of fund transfer had trickled down considerably and remittances through the legal route had surged after 1991. "The incentive to send money through illegal channels seems to have almost dried up with the liberalisation of the exchange rate in 1991," the report said.

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