International BusinessDubai crisis may not impact remittances: FinSecy
The Finance Ministry today said the financial crisis in Dubai, triggered by a slump in real estate, may not impact remittances sent by Indian expatriates in the Gulf.
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"Remittances from expats didn"t suffer during the period when the larger crisis was on. So whether this should have an impact in terms of employment, in terms of salaries and therefore in terms of remittances is somewhat unlikely," Finance Secretary Ashok Chawla told reporters here.
India gets nearly a quarter of its total remittances from the United Arab Emirates.
Former RBI Governor Y V Reddy said, "On the basis of past evidence, the recent development in the Middle East should not have any serious impact on the Indian remittances."
Chawla, however, said it will take some time for the Finance Ministry to examine the exact impact of the crisis on the Indian economy.
"We have seen the press reports. We will have to study what the issue is, what the problem is and what will be the possible implications, if any for the Indian economy, on the people, on the corporates. It will take some time for us to examine this," Chawla said.
Just a year after the global downturn derailed Dubai"s explosive growth, the city is now swamped in debt.
There are fears that Dubai"s conglomerate, Dubai World , may default on its around $59 billion debt and is seeking postponement of the debt until at least May because of the crisis triggered by real estate slump.