Research Reports

Transnational Capital Flows and Investment Culture in Coastal Andhra Pradesh

Author: S. Ananth

ABSTRACT

This report examines the investment and remittance practices of different kinds of migrants from the region of Coastal Andhra Pradesh, and traces the impact of capital flows from NRIs (Non-Resident Indians) on local asset markets. We find that the education level, the nature of job, the destination of migration, and the social background of the migrants play a critical role in determining the amount of money sent to India and the nature of investments made. Highly educated migrants (such as doctors and engineers) send larger amounts of money and their preferred investment is in land. In contrast, remittances from lower skilled workers come in smaller amounts, often on a monthly basis, and are used to meet household needs; their surplus too finds its way into the purchase of land. These flows reflect a deeply ingrained investment culture of this region. The report also highlights some of the innovative investment strategies and the formal and informal channels through which money flows into various asset classes.