Question : Statement 1: The Foreign Exchange Regulation Act (FERA) imposed strict controls on foreign exchange transactions.
Statement 2: FERA was replaced by the Foreign Exchange Management Act (FEMA) in 2002.
Option 1: Both statements are true.
Option 2: Both statements are false.
Option 3: Statement 1 is true, and statement 2 is false.
Option 4: Statement 1 is false, and statement 2 is true.
Correct Answer: Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (c) Statement 1 is true, and statement 2 is false.
Statement 1 is true. FERA was enacted in 1973 to regulate foreign exchange and payments in India. It imposed strict controls on foreign exchange transactions, such as requiring prior approval from the government for certain types of transactions.
Statement 2 is false. FERA was replaced by FEMA in 2000, not 2002. FEMA is a more liberalized foreign exchange management regime that allows for more freedom in foreign exchange transactions.
