Another dozen or so amendments are in the pipeline. After FEMA was introduced, the number of directives issued to the “authorised persons” was 36 in 2001–02; it had increased to 138 during 2011–12, 122 during 2012–13 and as many as 77 in less than 5 months in the current year.
Against a backdrop of four successive years of surpluses recorded in the current account of our balance of payments and less than buoyant aggregate demand in the economy, the Bank faces a policy dilemma. The market is flushed with liquidity for quite sometime. Excess supply of foreign exchange has given rise to a situation of excess rupee liquidity.