New Delhi: A Reserve Bank of India (RBI) data showed that Indians spending on overseas education and travel has grown more than 60 per cent year-on-year in May ahead of the academic session.
In its monthly bulletin, the RBI has explained that the overseas travel under the Liberalised Remittances Scheme (LRS) has gone up 56% to $568 million in May, while expenses on education and maintenance of close relatives have gone up 88% to $334 million and 21% to $300 million respectively.
Introduced by the RBI on February 4, 2004, the LRS scheme allows Indians to spend up to $2,50,000 a year abroad for a particular allowable current account. This particular amount includes expenses on overseas travel, education, maintenance of close relatives, gifts to family and friends abroad and medical expenses. In addition to this, the LRS allows Indians to open, maintain and hold foreign currency accounts with overseas banks for carrying out transactions.
Over a period of time, the LRS limit has been revised in accordance with the prevailing macro- and micro-economic conditions.
The RBI data also showed that the funds transferred under the LRS scheme have gone up over the past five years following the RBI’s decision to expand the scope by including certain transactions under overseas travel and education spending category. Outward remittances under LRS have gone up from $4.6 billion in FY16 to $13.8 billion in FY19.
It has also been noticed that spending on university tours by families of aspirant students has increased significantly. Travel industry specialists also opine that Indians are spending more on travelling abroad than ever before.
Meanwhile, the Indian government is also planning to bring major changes in the higher education sector with Finance Minister Nirmala Sitharman in her Union Budget 2019 announcing to provide Rs400 crore for world-class institutions in India.