A study paper presented at the South Asian Network on Economic Modelling (SANEM) has come up with, among others, two critical observations on remittance use at home. First, the remittance sent by migrant workers is not spent adequately on education and health by the receiving families. The second one is positive in that the share of remittance expenditure on food consumption has declined considerably. Now the study analyses mostly the impact of scarce expenditure on education and health. Here the contention is that human capital formation is thus ignored either on account of lack of awareness or collective negligence. No agency or individual is responsible for providing the remittance earners or their families back home with financial counselling. It is not clear if the expenditure is less on food, the same is true for other consumer goods or modern gadgets. Perhaps not. But less expenditure on food may have double meanings. Investment in land and farms may have accounted for adequate supply of foods from own sources or it may mean living on poor quality of foods as well.
One thing is clear that better use of remittances can make a difference in rural economy. Yet the best investment ought to be in the education of young members in the remittance-receiving families. This indeed has the potential to lead to a paradigm shift in socio-cultural standing of the family concerned. There is a real chance for the families concerned to move up the social ladder and bring about changes in the living standard. When a family has taken care of its educational and health needs, it should share the dividend with others. How? If the money families receive has a surplus for investment in productive sectors -preferably small and medium enterprises (SMEs), it creates employment for neighbours. Thus the remittance can be instrumental in benefitting people outside the families.
The study has tried to link inflow of remittance with technological innovation in the production process of manufacturing sector. Ideally, setting up of appropriate SME units has the potential to absorb the unemployed youths in villages. But this is a long process that calls for formulation of right policies by the government. Large-scale automation curtails jobs rather than creating those. Also youths need proper education and training in order to be fit for the jobs on offer. Technical institutes should be tailored to the needs of the country. Even skill development of youths will qualify them for better placements abroad.
Now the issue of proper use of remittance should be made a subject of serious academic discussion. Even if remittance receivers could be briefed or motivated by presenting rough sketches of a better future for the young members of their families on investment in education and nutritious foods, many of them might be convinced of the merit. But unfortunately, no such initiative is there from the government side. It could encourage such families through an awareness campaign launched nationwide. Promotional campaign can indeed bring about a change in the mindset. Better it would be if the Ministry of Expatriates' Welfare and Overseas Employment had organised the matter under its aegis in some institutional form.