Migration, remittances and rural development: findings of a case study in the Indian Punjab

Rural household survey data in the Ludhiana district of the Indian Punjab was used to study the nature and role of remittances in rural development. Of the 1646 outmigrants from the area since 1961, the 949 women who migrated for marriage and children under 12 years old were excluded from the study. Nearly all husbands who outmigrated had sent remittances. Parents and grandparents were 2nd and 3rd most likely to remit, but their numbers were small. Education did not correlate with remittance. Distance and time since emigration did not affect remittance. The frequency and the size of remittances are discussed. Remittances to outmigrants were insignificant. The remittances from outmigrants seem to raise the incomes and the levels of living of rural households. The remittances serve the purpose of redistributing income from urban to rural areas. Remittances also widened the gap between rich and poor in the rural areas because the better-off groups were more likely to receive remittances than the poorer groups. Most of the money sent from outmigrants was spent on consumable goods, food and clothing. Only a small proportion was spent on productive investment. This was usually done by farming families who invested in land or farm necessities. It is concluded that remittances from outmigrants can have a positive effect on the rural economies. Investment opportunities for nonagricultural families must be provided.