Page 126 - economic_survey_2021-2022

100 Economic Survey 2021-22

3.34 Business services with the largest share in services imports grew by 0.9 per cent on y-o-y
basis in H1: FY 22. Amid resumption in global activity coupled with international shortage
in shipping vessels, transportation costs escalated, resulting in large increase in transport
payments that grew by 64.9 per cent on y-o-y basis to US$ 14.8 billion in H1: FY 22. Outward
travel also resumed in H1: FY 22 with travel payments reporting growth of 23.1 per cent
compared to H1: FY 21. The quarterly component-wise services imports data is presented in
Annexure III.

PRIVATE TRANSFERS

3.35 In H1: FY 22, the net private transfers – mainly representing remittances by Indians
employed overseas – grew by 7.2 per cent to US$ 38.4 billion, over corresponding period a year
earlier and by modest 0.1 per cent over H1: FY 20, exceeding the pre-pandemic levels. As per
the Migration and Development Brief 35, World Bank (November 2021), India continues to be
the largest remittance recipient country in the world in 2021 (in current US dollar terms) and has
been so since 2008. After bottoming out in Q1: FY 21, net private transfers registered positive
growth and amounted to US$ 19.2 billion in Q2: FY 22 (Figure 11).

Figure 11: Remittances
a. Net Remittances in India b. Remittance Inflows in 2021*

Net Remittances Growth in Remittances (RHS) 100 87
21 20
20.2 80
20 19.5 19.2 15
19.1 18.7 18.6 19.1 19.2 10 60 53 53
19
US$ Billion 18 17.2 5 0 Growth rate (y-o-y), Per cent US$ Billion 40 36 33 33 27 23 20 18
18.2
17
16 -5 20
15 -10 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 India China Mexico Philippines Egypt Pakistan France Germany Vietnam
2019-20 2020-21 2021-22 (P) Bangladesh

Source: Reserve Bank of India and World Bank
Note: *: Estimates

INVISIBLES

3.36 On account of higher net services receipts and private transfers, net invisibles were higher
at US$ 72.1 billion in H1: FY 22, compared to US$ 60.1 billion last year (Table 5) and US$
63.7 billion in H1: FY 20, surpassing the pre-COVID levels. Following the trend of services
and transfers, net invisibles also experienced increase beyond Q1: FY 21. However, there is
sequential decline in Q2: FY 22 due to higher net outgo from the primary income account,
mainly reflecting net overseas investment income payments (Figure 12).

Table 5: Net Invisibles and its components
(US$ Billion)

Year / Item (Net) 2019-20 2020-21 2020-21 H1 2021-22 H1 (P)

Invisibles 132.8 126.1 60.1 72.1
Services 84.9 88.6 41.8 51.4