Return Migration and Remittance Use in Reshaping Kerala's Rural Economy: An Analysis of Economic Transformation and Rural Development Patterns (1998-2023)

Abstract

This study examines the association between return migration, remittance utilization, and Kerala's rural economic transformation from 1998 to 2023, utilizing data from nine rounds of the Kerala Migration Survey (KMS). Findings reveal that remittances increased from ₹13,652 crores in 1998 to ₹216,893 crores in 2023, representing 23.2% of the state's Net State Domestic Product (NSDP). Return migration reached 1.79 million individuals by 2023, with 38.3% increase from 2018, coinciding with COVID-19 economic disruptions. Remittance utilization patterns have shifted from consumption-oriented spending to productive investments, with 15.8% allocated to housing renovation, 14% to loan repayment, and 10% to education. Rural households with migration experience exhibit superior asset ownership, with emigrant households showing 39.7% motor car ownership compared to 23.7% among non-migrant households. The agricultural sector has transformed from traditional farming toward cash crop cultivation and service sector activities. These findings highlight the complex nature of migration-led development, offering economic benefits while creating challenges for sustainable rural development and agricultural productivity.