Question : The major objective of the Foreign Exchange Regulation Act (FERA) was to:
Option 1: Promote foreign investment
Option 2: Regulate imports and exports
Option 3: Control foreign exchange transactions
Option 4: Promote international trade
Correct Answer: Control foreign exchange transactions
Solution : The correct answer is (c) Control foreign exchange transactions.
The major objective of the Foreign Exchange Regulation Act (FERA) was to control and regulate foreign exchange transactions in India. FERA was enacted in 1973 and was aimed at conserving foreign exchange reserves, preventing unauthorized dealings in foreign exchange, and regulating the flow of foreign currency in and out of the country. It imposed strict regulations on currency transactions, foreign investments, and the holding of foreign assets. FERA was later replaced by the Foreign Exchange Management Act (FEMA) in 1999, which introduced a more liberalized framework for foreign exchange transactions.
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