Question

1- Bring out the salient features of FEMA and differentiate them with those of FERA.​

Answer 1

Answer:

The major differences between FERA and FEMA are:

Foreign Exchange Regulation Act (FERA) Foreign Exchange Management Act (FEMA)

Parliament of India passed the Foreign Exchange Regulation Act in 1973 Parliament of India enacted Foreign Exchange Management Act (FEMA) on 29 December 1999 replacing FERA.

FERA came into force from January 1, 1974. FEMA came into force from June 2000.

FERA was repealed in 1998 by Vajpayee Government FEMA succeeded FERA

FERA has 81 sections FEMA has 49 sections

FERA was conceived with the notion that Foreign Exchange is a scarce resource. FEMA was conceived with the notion that Foreign Exchange is an asset.

FERA rules regulated foreign payments. FEMA focused on increasing the foreign exchange reserves of India, focused on promoting foreign payments and forein trade.

The objective of FERA was conservation of Foreign Exchange The objective of FEMA is Management of Foreign Exchange

The definition of “Authorized Person” was narrow. The definition of “Authorized Person” was widened

Banking units did not come under the definition of Authorized Person. Banking units came under the definition of Authorized Person.

If there was a violation of FERA rules, then it was considered as Criminal offence. If there was a violation of FEMA rules, then it is considered as civil offence

A person accused of FERA violation was not provided legal help. A person accused of FEMA violation will be provided legal help.

There was no provision for Tribunal, the appeals were sent to High Courts There is provision for Special Director (Appeals) and Special Tribunal

For those guilty of violating FERA rules, there was provision for direct punishment. For those guilty of violating FEMA rules, they have to pay a fine, starting from the date of conviction, if the penalty is not paid within 90 days, then the guilty will be imprisoned.

If there was a need for transferring of funds for external operations, then prior approval of the Reserve Bank of India (RBI) is required. For External trade and remittances, there is no need for prior approval from the Reserve Bank of India (RBI).

There was no provision for IT There is provision for IT

Explanation:

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