Parliament nod for Fema bill

Parliament nod for Fema bill
ENS ECONOMIC BUREAU

NEW DELHI, DECEMBER 8: Parliament on Wednesday approved the foreign exchange management act (Fema) bill, with the Rajya Sabha passing it by voice vote amidst a protest walkout by non-Congress opposition parties.

The Lok Sabha had passed Fema along with the prevention of money laundering bill on December 2. The prevention of money laundering bill, which also came up for consideration in the Rajya Sabha on Wednesday, was referred to the select committee of the Upper House after discussion.

The twin legislations are to replace the outmoded and draconian Foreign Exchange Regulation Act (Fera). The bill was passed after negating amendments moved by CPM member Ramachandran Pillai to refer it to a select committee.

In the case of the money laundering bill, a similar amendment was moved by both the Congress and Left parties, which was conceded to by finance minister Yashwant Sinha, who had piloted the twin legislations in the House.

Replying to the discussion, Sinha said the accountability of the Governmentwas complete and that it was diluted with the inclusion of a provision to suspend rules in dealing with certain foreign exchange violations.

The provision has been incorporated for dealing with situations which need immediate attention. He also denied the power of implementation on foreign exchange management has been taken away from the Reserve Bank of India (RBI). Just as in any other regulatory authority, the bill provides powers to the Government to issue directions.

The bill has been necessitated as the time has come to shift from regulation to management of foreign exchange in the wake of an improved forex position.