competition success review

competition success review

competition success review Published this article page no   127 CAPITAL ACCOUNT CONVERTIBILITY (CAC) Why in news? Recently the Deputy Governor of RBI indicated towards fundamental shifts in the capital account convertibility framework in India resurrecting a debate relating to Capital account liberalization. What does capital account convertibility (CAC) mean? Convertibility refers to the ability to convert domestic currency into foreign currencies and vice versa to make payments for balance of payments transactions. Thus CAC is the ability or freedom to convert domestic currency for capital account transactions. Regulation of CAC Presently India has partial capital account convertibility started in 1990s. Past Committees to recommend a pathway towards fuller CAC o Committee on CAC 1997 (Tarapore Committee 1997) recommended full CAC for 19992000 based on fulfilment of certain benchmarks related to Fiscal Deficit Inflation NonPerforming Asset (NPA) etc. o Committee on Fuller CAC 2006 (Tarapore Committee 2006) suggested measures for gradual capital account liberalization. Steps taken to move towards fuller CAC Fully Accessible Route (FAR) to remove limit on nonresident investment in specified GSecs. RBI has allowed banks which operate International Financial Services Centre Banking Units (IBUs) to trade in nonconvertible forward (NDF) rupee market. o An NDF is a foreign exchange derivative contract allowing investors to trade in nonconvertible currencies with contract settlement in a convertible currency. Liberalized Remittance Scheme to allow all resident individuals including minors to freely remit up to USD 250000 per financial year for any permissible current or capital account transaction  or a combination of both. Reduced FDI restrictions in all sectors except for some sectoral caps or restrictions in socially sensitive (e.g. gambling) volatile (e.g. real estate) and strategic (e.g. atomic energy) sectors competition success review buy.

competition success review