Recently, Reserve Bank of India has done away with requirement of resolution of the Board of Directors for undertaking forex transactions. Now, an authorised signatory like the Managing Director or Chief Financial Officer of a company can approve employees to conduct forex transactions on behalf of the corporate.
This directive was issued on the 20th of January 2014 under RBI A.P (DIR Series) Circular No. 97
One rule of the Income Tax Act that is going to have far reaching consequences – and one that all travellers should be aware of – is Section 114 (b). This rule pertains to payment in cash – in connection with travel to any foreign county – of an amount exceeding twenty-five thousand rupees at any one time. It states that all such payments will have to be backed by PAN Card details.
“Payment in cash in connection with travel” includes payment in cash towards fare, or to a travel agent or a tour operator, or for the purchase of foreign currency.
The expression “travel to any foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as may be specified by the Board under Explanation 3 of sub-section (1) of section 139.
First things first, why should INR even try to regain such a position? Every time the Rupee falls, the ease of doing business for big companies go up – well atleast for some time – especially those who earn in dollars and spend in rupees i.e. those with clientele abroad. Now many will tell you that the reason has to do with national pride – a strong and stable currency is the sign of a stable economy – and a falling rupee leads to fall in esteem. But the real, much deeper cause of concern lies elsewhere. A falling rupee further deepens the divide between the oft-spoken ‘two Indias’ – one that earns in rupees, and the other that earns in dollars. The ‘in rupee-earner’ – which is what the entire agrarian sector and indigenous sector is – takes a big hit with the accompanying price rise that is quintessential to a fall in Rupee.
In short, the falling Rupee is one of the most important causes of social disparity in the country, and our government will do well to ensure measures against its recent freewheeling phenomenon. Given the current scenario, most of the measures taken have been reactive, and short-term. Probably the single-most effective method of elevating the Rupee is by encouraging and allowing enterprise within the people. Indians are entrepreneurial by nature, but it has become increasingly impossible for enterprising youngsters to take the leap of faith. A number of businesses die an early death every year.
We are seeing the last few months of the current government. One hopes that the ‘decision-making paralysis’, which is often attributed to this government, will be a thing of the past, come June 2014. Till that point in time it is very unlikely that the dollar will breach the below-60 INR mark. However, a good mandate by the people of the country will straightway bring the faith back in the Indian economy and its ambassador – the Indian National Rupee, and we could see the Rupee begin trading more strongly. What will sustain this, and help the INR regain it around-55-Rupee-to-a-US dollar status, will be the new government’s ability to cull out corruption and encourage the enterprising Indian to turn entrepreneur. Let’s not forget that a strong and able government that fosters proactive business policies and non-corrupt practices, will help India regain the faith of the global business community; naturally bringing in more foreign investment and flow of dollars into India. For only when a nation shows faith in its people, does the world show faith in that nation.