In view of an acute shortage of foreign exchange reserves, FERA, 1947, was replaced by FERA, 1973 which sought to put in place stringent controls “….for the conservation of the foreign exchange resources of the country and the proper utilization thereof….”.
7 While this approach continued in the 1970s and 1980s, there was a paradigm shift in the approach to external sector management in the early 1990s, when the Rupee was made fully convertible on the current account and the lietmotif changed from conservation of foreign exchange to the management of foreign exchange through facilitation of external trade and payments as well as orderly development of foreign exchange markets.