What are the main difference between FERA 1973 and FEMA 1999?

	Before going to main point I want to share with you some important point about FERA 1973 and FEMA 1999.
Before going to main point I want to share with you some important point about FERA 1973 and FEMA 1999. Well, Foreign Exchange Management Act or FEMA was passed in the winter session in the year 1999 and replace the previous Foreign Exchange Regulation Act 1973. Government of India Replace the FERA act because of Liberalization policy taken by Government. Under FERA 1973 every foreign transaction were prohibited unless specifically permitted. Under other laws “A persons presumed innocent unless he is proven guilty” but under FERA 1973 “A person presumed guilty unless he proved himself innocent” (Source: Wikipedia.com) Under new act FEMA 1999 all current account transaction are permitted but some restriction applied on Capital account transaction. That’s why Indian currency is partially convertible. Ooo. You think about Current account and Capital Account transaction. Please do not mix it with your bank current account. In foreign exchange market Current account transaction means using foreign currency for any purpose which does not create any asset or Liability abroad, like daily expenditure for living, medicine, education etc. Capital Account Transaction means using foreign currency for the purpose which create asset or liability abroad, like buying House, Land, Share, taking Loan etc.
Ok… now the main topic- Difference between FERA 1973 and FEMA 1999
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FERA 1973 FEMA 1999 1) It was passed in 1973 1) It was passed in the Year 1999 2) It was 81 Sections. 2) It is small enactment with only 49 Sections. 3) It was wide range of application; all type of Foreign exchange related transaction was controlled by this Act. 3) Limited range of application. Specifically mentioned Foreign exchange transactions are controlled by FEMA. 4) As per FERA, Foreign Exchange Transaction was very conservative and restrictive. 4) As per FEMA, Foreign Exchange Transactions are very open and welcoming. 5) Violation of FERA counted as a criminal offence. 5) Violation of FEMA counted as a Civil Offence.
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