The Hindu Business Line : Chamber seeks further easing of FEMA

THE Associated Chambers of Commerce and Industry of India (Assocham) has sought further liberalisation in Foreign Exchange Management Act (FEMA) to attract and encourage foreign direct investments in mass housing, real estate development, including agriculture and plantations from the people of Indian origin (PIOs) and non-resident Indians (NRIs).

The present stipulations of FEMA which came into existence in 2000, restricts PIOs and NRIs from parking their surplus funds in the aforesaid areas, barring permitting them to invest only in town planning and small real estate development.

In a representation to the Government, the Assocham President, Mr Mahendra K. Sanghi, while strongly appreciating the working of FEMA during the last four years, stressed the need for opening up real estate sector, mass housing, agriculture and plantations to PIOs and NRIs.

According to Mr Sanghi, this would help generation of employment opportunities besides making NRI/PIOs investment partners for growth process like China that has received huge forex resources for FDI from the Chinese expat community.

Mr Sanghi also suggested that Export Earnings Foreign Currency be made fully convertible as a prelude to capital account convertibility. These accounts must bear interest at global rates and the credit facilities against its collateral must be allowed.

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