Patna, Aug. 23: As economists grapple with the sliding rupee, many in Bihar who depend on remittances from abroad are smiling all the way to the bank.
Senior citizens whose children reside abroad have suddenly found that their accounts have a healthier balance with the dollar and pound yielding more in rupee terms.
“My son is an engineer working in Canada. Though I do not entirely depend on the money sent by him, he does send cash every second or third month. He recently said that with the dollar paying more, he would send money next month for us to buy a car,” said O.P. Yadav, a resident of Gardanibagh in Patna.
One US dollar sent to India fetched Rs 44 on August 1, 2011. However, the same dollar gave Rs 65.56 on Thursday, a gain of Rs 21.56 in two years. Today though, the rupee rallied back to end the day at Rs 63.20. (See Business)
People staying abroad remit money to India through non-resident external (NRE) and non-resident ordinary rupee (NRO) accounts. Buying gifts in India for relatives by transferring dollars and other currencies has also become cheaper for those staying abroad.
Medha Verma, who lives with her husband in Dubai, gifted a smart phone costing Rs 33,000 to her father, who resides on East Boring Canal Road. Though the phone was ordered on eBay, the payment was made by Medha’s brother in India. “The phone cost 2,200 dirhams in Dubai, which is equivalent to around Rs 37,500. But I had to transfer only around 1,950 dirhams to my brother’s account here to get the same phone,” said Medha, who was delighted as the phone was delivered to her father in her presence as she had come home for Rakhi.
The builders’ body in the state capital says it is an ideal time for NRIs to make small investments in property in Patna or elsewhere in Bihar. “Enquiries from NRIs having roots in Patna for buying property back home have risen considerably over the past few days. It is an opportunity to make windfall gains as property rates are cheaper by around 20 per cent for those earning in US dollars or the British pound,” said Sachin Chandra, state chairman, Bihar chapter, Builders Association of India (BAI).
Apart from increased remittances by people staying in the US and UK, a large number of people from districts such as Siwan and Gopalganj who work in West Asian countries like the UAE, are also exploiting this flip-side of the weak rupee for sending more money back home. The dirham, the currency of the UAE, is, like the rupee, also pegged to the dollar.
Family members of Dilip Tiwari, of Bhorey block in Gopalganj district, now have the means of carrying out some construction work in their house. “My son works as a welder in Dubai. He used to send 500 dirhams every month for the family. Till six months ago, we used to get around Rs 6,500 for the same but we have now started getting around Rs 8,500 for the past couple of weeks. He has said he would send 1,000 dirhams once he gets his salary in September, so that we could do some repair work at our paternal house,” said Subhash Tiwari, a resident of Tiwari Chakiya village at Bhorey block in Goplaganj district.
One dirham sent to India fetched Rs 14.79 on February 28 this year. The same dirham yielded Rs 17.49 on Thursday, a gain of Rs 2.7.
According to estimates, Siwan stands second in the amount of foreign currency remitted to India. More than 40 per cent of the population in Siwan works in Gulf nations as electricians, fitters, labourers and other small workers. Sources said that around Rs 4,500 crore is deposited in various branches of different banks in Siwan district every year and 40 per cent of this amount is remitted from abroad.
However, the heat of the weak rupee is being felt across the tourism and education sectors.
“The outbound tourist flow from the state is getting affected due to the plunge in the rupee. For instance, if a hotel room whose rent is $80 cost Rs 4,500 around six months ago, the same room has to be booked for Rs 5,200 now. However, the inbound tourist flow has increased. Foreigner tourists seem to be preferring India as they have to spend less in dollar terms. Over 60 foreign tourist groups have already come to Bihar in August, which is normally considered an off-season,” said Shailesh Kumar, the chief executive officer of Nalanda Travels.
Consultants providing services for overseas studies are also facing the impact of a tanking rupee. “Enquiries for higher studies abroad have almost been negligible over the past two months. Students are now double checking their expense of studying abroad as it has increased considerably due to the plummeting rupee,” said Tushar Kanti Aikat, the proprietor of The Merciel Consultancy Services in Patna.
Additional reporting by Rakesh K. Singh in Siwan