Commentary on The Foreign Exchange Management Act

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Description
Our country is spending huge amount on the import of foreign technology in different fields to become self-sufficient (Atmanirbhar). We are spending profusely on crude oil and other essential imports making foreign exchange a precious commodity for India. The earlier efforts to control foreign exchange by way of the Foreign Exchange Regulation Act, 1947 did not bring the desired results despite various amendments to the Act. Hence, Foreign Exchange Regulation Act, 1973 (FERA) was enacted to consolidate and amend the law relating to certain payments dealing in foreign exchange, imports and exports and import of currency, for conservation of foreign exchange resources of the country and proper utilisation thereof in the interest of economic development of the country. But FERA also could not achieve the desired results to control foreign exchange and to maintain a healthy balance of payment position of the country, despite inclusion of penal provisions in the Act that provided for sentence of imprisonment for foreign exchange violations and provisions of strict control on investments connected with foreign exchange. Thereafter, on account of several reasons including hefty foreign remittance and liberalisation of economy, the foreign exchange position of the country became healthy paving the way for shunning the strict control regime by enactment of the present Foreign Exchange Management Act, 1999 (FEMA).
There has been a material change in the fundamental policy of exchange control as enacted then under FERA and now as contemplated under FEMA. FERA was enacted at the time when India's economy was a closed economy and the emphasis was to conserve foreign exchange by effectively prohibiting transactions in foreign exchange, unless permitted. In FEMA the emphasis is on management of foreign exchange as the name of the Act itself suggests. Foreign exchange violations are not treated as a serious crime which would entail punishment of imprisonment. These violations are compoundable and punishable with fine, though on a higher side. In order to achieve the objectives of management of foreign exchange, the Central Government, by exercising powers under Section 46 of the Act, has framed different Rules. The Reserve Bank of India being a regulatory authority has also made Regulations on different topics under the Act from time to time by exercising powers under Section 47 of Act. All these important Rules and Regulations are part of the Appendices to this book.
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Contents
Chapter I Preliminary
Chapter II Regulation and Managment of Foreign Exchange
Chapter III Authorised Person
Chapter IV Contravention and Penalities
Chapter V Adjudication and Appeal
Chapter VI  Directorate of Enforcement
Chapter VII Miscellaneous
Appendicies
Table of Cases
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Author Details
S. K. Sarvaria
BA (Hons) Economics, LL M Retired District and Sessions Judge, New Delhi
Former President, District Consumer Disputes Redressal Forum, New Delhi
Apoorv Sarvaria
BA LL B, LL M Former Metropolitan Magistrate/Civil Judge, New Delhi
Insolvency Professional & Qualified Independent Director
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