Causes due to which FEMA came into existence
- The major criticism of FERA 1973 was that it Emphasis more on regulation rather than on development
- the law was not properly blended with economy is and the consequences of inadequate growth and poverty in country
- At that stage Government of India decided that further review of FERA would be undertaken in the light of DEVELOPMENT and experience in relation to the foreign trade and investment
- sustainable increasing foreign exchange
- growth in foreign trade
- rationalisation of tariffs and liberalisation of economy
- these development self explanatory in the nature are very vital for the economy keeping all those changes in views Central government decided to introduce a new act named FEMA in July 1998 in Parliament and repeal of FERA 1973
Objective of FEMA
- To consolidate the law relating to foreign exchange suit the development need of economy
- to facilitate the external trade and payment
- to promote orderly development and maintenance of an Asian market in India
- to get sustainable increase in foreign Reserves
Features of FEMA
- The emphasis is more on the management side of the foreign exchange while FERA was totally emphasised on the regulatory side on the foreign exchange
- no person can transfer foreign exchange other than the authorised person
- no person resident India shell acquire own poses for transfer any foreign exchange, foreign security immovable property situated outside India
- applicable all over India it has a very strong is striking features as compared to FERA
