India: Black money out, white money in--India may be top recipient of remittances, says World Bank


In India, black money goes out and white money comes in, suggests new findings from the World Bank.

Even as India's anti-corruption activists and opposition lawmakers rail about the allegedly vast sums of black money squirreled away in Swiss bank accounts, India looks set to top the world in remittances sent back home from abroad, according to the World Bank study.

India is set to receive about $70 billion by the end of the year, with China coming second at $66 billion, the Economic Times reports.

The Philippines and Mexico, with $24 billion each, and Nigeria with $21 billion, are next on the list. The other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon, the paper said.

India's most reliable source of foreign exchange, the Indian diaspora has brought in nearly $135 billion this year in remittances and non-resident Indian deposits, according to ET. Outstanding NRI deposits are estimated at $35 billion. However, unlike remittances, most NRI deposits are reversible.  

But the picture isn't entirely rosy. The same anti-corruption activists who harangue the government for failing to track down tax evaders holding money in havens like Switzerland and Mauritius also say a large part of India's foreign direct investment comes from the practice of "round-tripping" -- as untaxed cash goes out black and comes back white.