{"id":239727,"date":"2023-04-26T19:57:34","date_gmt":"2023-04-26T14:27:34","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=239727"},"modified":"2023-04-27T17:22:42","modified_gmt":"2023-04-27T11:52:42","slug":"turning-the-clock-back-on-liberalised-remittance-scheme","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/turning-the-clock-back-on-liberalised-remittance-scheme\/","title":{"rendered":"Turning the clock back \u2013 on Liberalised Remittance Scheme"},"content":{"rendered":"\n

Source: <\/strong>This post is created based on the article \u201cTurning the clock back<\/strong>\u201d published in Business Standard<\/strong> on 26th<\/sup> April 2023<\/strong>.<\/p>\n

Syllabus Topic:<\/strong> GS Paper 3- Indian Economy, Liberalisation<\/p>\n

Context:<\/strong> In the recent times, government has tightened the restrictions on how Indians can remit money overseas.<\/p>\n

Post-1991 reforms, Liberalised Remittance Scheme, or LRS was introduced. It permitted individuals to send $250,000 out of the country, in a calendar year.<\/p>\n

The limit was reduced to $75,000 in 2013 as a macro-prudential measure. However, this limit was gradually restored to earlier $250,000.<\/p>\n

This policy depicted confidence in the Indian economy\u2019s strength, rupee\u2019s float and the sustainability of the country\u2019s external account.<\/p>\n

However, in recent years, this policy has been reversed. The government has systematically tightened the restrictions on how individuals can remit money out of the country.<\/p>\n

What are the changes introduced linked to the outward remittances?<\/strong><\/h2>\n

First,<\/strong> the finance bill of the last session of the parliament has increased the TDS on remittances to 20% from the earlier 5%.<\/p>\n

Second, <\/strong>Purchases done through the credit card abroad are also being sought to be brought into the regulatory net by the government.<\/p>\n

Third, <\/strong>Furthermore, Reserve Bank of India has set a 180-day limit on any funds sent outside the country. Within this period, the funds either should be invested in any instrument or repatriated.<\/p>\n

The funds in the foreign deposit accounts will not be considered an investment.<\/p>\n

What are the implications of tightening of outward remittances?<\/strong><\/h2>\n

Due to repatriation of the money, it will cycle back in the economy. It will lead to an increased transaction cost.<\/p>\n

Globally, restrictions on remittances are seen as a sign of insecurity among policymakers about the direction of the economy.<\/p>\n

It reduces the freedoms to Indian investors, where and how they like to invest.<\/p>\n

High levels of restrictions for such transfers will increase the incentive for evasion or the return of illegal and opaque systems.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: This post is created based on the article \u201cTurning the clock back\u201d published in Business Standard on 26th April 2023. Syllabus Topic: GS Paper 3- Indian Economy, Liberalisation Context: In the recent times, government has tightened the restrictions on how Indians can remit money overseas. Post-1991 reforms, Liberalised Remittance Scheme, or LRS was introduced.… Continue reading Turning the clock back \u2013 on Liberalised Remittance Scheme<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216,11512],"class_list":["post-239727","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","tag-liberalised-remittance-scheme","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/239727","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=239727"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/239727\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=239727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=239727"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=239727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}