Indians may soon be allowed to spend up to $200,000 a year outside the country against the current limit of $75,000.
The Reserve Bank of India (RBI), which had imposed the restriction after the current account deficit (the difference between inflows and outflows of a foreign currency) widened to an alarming level, is likely to take a decision on the issue soon, a senior government official said.
However, now with CAD coming down to manageable levels, the central bank is set to look into the matter and relax norms. Individuals would be even allowed to spend on real estate, once the norms are relaxed.
Former RBI governor D Subbarao had reduced the amount an individual could take out of the country from $200,000 to $75,000 at the peak of the CAD crisis in the middle of last year in order to stem the outflow of dollars.
In 2012-13, CAD had touched a record high of 4.8% of the GDP after which the UPA government and the RBI took several measures to contain the outflow of dollars. According to estimates, currently it could be below 2%.
The rupee has also appreciated to sub-59 level against the dollar from 68.85 in August 2013.
“With things looking to be in control, the artificial restrictions could be removed and the central bank is looking into these,” the official said.