Indians spend 60% more on overseas travel & education – RBI
Posted on July 17, 2019
The spending habits of Indians are indeed changing with the times.
As per the latest figures revealed in RBI’s monthly bulletin, there is a noticeable increase in the overall spending by the Indians on overseas travel and education.
Under the LRS, almost a 60% increase in spending has been witnessed. These figures relate to a period right before the next academic session.
Introduced on February 4, 2004, the Liberalised Remittance Scheme (LRS) is a liberalization measure for facilitating residents of India to remit funds overseas. These funds can be transferred for –
- Permitted current account transactions
- Permitted capital account transactions
- A combination of both.
Initially launched with a capping of USD 25,000, the maximum that you can spend under LRS has been revised at different stages.
As of now, the LRS limit stands at USD 2,50,000. All resident Indians – with the inclusion of minors – can remit up to a maximum of USD 2,50,000 in a fiscal year (that is, from April to March). The transactions should be permissible to be allowed.
As per the RBI, spending by Indians by LRS (in USD Million):
|Item||May 2019||May 2018|
|Outward Remittances under the LRS||1,486.1||996.1|
|Maintenance of close relatives||300.0||248.8|
With a 56% surge, the outlays on travel abroad under LRS amounted to USD 568 million in May 2019.
Expenses on the maintenance of close relatives and education also witnessed growth from 2018 to 2019. Recording a 21% hike from 2018, the maintenance of close relatives amounted to USD 300 million in 2019.
Outlays under LRS on Education witnessed 88% increase when compared to the previous year. In 2019, education under LRS recorded USD 334 million.
In recent years, overseas education has come to be a major source of the outflow of funds in U.S. Dollars.
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