Businessworld
Raghu Mohan
The Liberalised Remittance Scheme (LRS), introduced in February 2004, permitted Indian residents to remit up to $25,000 per year for current or capital account transactions, or a combination of both. The limit was enhanced to $50,000 in December 2006, then to $100,000 in May 2007 and, finally, to $200,000 with effect from 26 September 2007.
The pattern of investment by Indians in foreign countries — after the limit was increased to $200,000 in September 2007 — is evident in the figures released recently by the Reserve Bank of India (RBI). And the surprise is: contrary to expectations that most Indians were investing in real estate abroad, it is equity and debt that garnered the lion’s share. At $144.7 million, equity and debt comprised a third of the total investments of $440 million in 2007-08. Realty was a distant third at $39.5 million, behind gifts at $70.3 million.
