How Does Remittance Impact on Economic Development in South Asia? A Dynamic Ordinary Least- Square Approach Altaf Hossain 1 , Arnab Kumar Podder 2 and Mohammed Asaduzzaman 3 Abstract This paper aims to examine the impacts of remittances on the economic development of four South Asian countries: Bangladesh, India, Pakistan and Sri Lanka. The study considers the World Bank’s bal- anced panel data (1977–2017). The dynamic ordinary least-square approach finds mixed results, which explain the realisation of the pluralistic approach. Evidence shows that remittances directly increase gross domestic product, household consumption and expenditure and decreases government con- sumption expenditure, inflation and population growth. However, the flow of remittances is not pro- moting private bank credit; rather it increases import-dominated trade. Besides, remittances are yet to be significant at gross capital formation. Therefore, we recommend that policymakers should find a way to bring remittance through formal channels for capital formation and investment. Fortunately, remittance inflows indirectly cause population control and sustainability. Decision-makers should also formulate policies that will modify remittance-induced current production and consumption patterns to promote the process of sustainable development further. JEL Codes: C01, F60, O10, O15, O40 Keywords Remittances, economic development, sustainable development, South Asia 1. Introduction Although remittances are not a new subject in the discourse of development, their robust inflows are new financial phenomena in the developing economies (Meyer & Shera, 2017). They have gained massive importance in the economic development of developing countries during the past more than Article 1 Department of Statistics, Islamic University, Kushtia, Bangladesh 2 Industrial Service Centre BSCIC, Bagerhat, Bangladesh 3 Department of Public Administration, Islamic University, Kushtia, Bangladesh Corresponding author: Mohammed Asaduzzaman, Department of Public Administration, Islamic University, Kushtia 7003, Bangladesh. E-mail: asaduzzaman.mohammed@gmail.com The Indian Economic Journal 67(1–2) 68–81, 2019 © 2020 Indian Economic Association Reprints and permissions: in.sagepub.com/journals-permissions-india DOI: 10.1177/0019466220941427 journals.sagepub.com/home/iej