Turning the clock back

New rules on remittances may rein in legal transfers

The government and the central bank have over months and years systematically tightened restrictions on how Indians can remit money overseas. The Liberalised Remittance Scheme, or LRS, is one of the signature achievements of the post-1991 reforms. By allowing individuals to send money out of the country up to an amount of $250,000 a calendar year (at current levels), it revealed a degree of confidence in the Indian economy’s strength as well as in the rupee’s float and the sustainability of the country’s external account. Countries that are nervous about outflows and possible crises do not allow their citizens to