Switch From FERA
The done in 1974, a period when India’s foreign exchange reserve position wasn’t at its best. A new control in place to improve this position was the need of the hour. FERA did not succeed in restricting activities, especially the expansion of TNCs (Transnational Corporations). The concessions made to FERA in 1991-1993 showed that FERA was on the verge of becoming redundant. After the amendment of FERA in 1993, it was decided that the act would become the FEMA. This was done in order to relax the controls on foreign exchange in India, as a result of economic liberalization. FEMA served to make transactions for external trade (exports and imports) easier – transactions involving current account for external trade no longer required RBI’s permission. The deals in Foreign Exchange were to be ‘managed’ instead of ‘regulated’. The switch to FEMA shows the change on the part of the government in terms of foreign capital.
Read more about this topic: Foreign Exchange Management Act
Famous quotes containing the word switch:
“Uncritical semantics is the myth of a museum in which the exhibits are meanings and the words are labels. To switch languages is to change the labels.”
—Willard Van Orman Quine (b. 1908)