imagesToday India wake up to the 66th anniversary of free India with reduced freedom. The Reserve Bank of India (RBI) on Wednesday reversed the long-term secular trend of easing capital controls by severely limiting the amount of money citizens can remit abroad, and businesses can invest in foreign ventures. Gold imports are being further squashed.This gives me the feeling of 1991.

RBI put a spoke in their collective wheel by indicating that Indian companies can invest only amounts equal to their current net worth abroad through the automatic route – as against four times their net worth currently. If this norm had been in place 10 years ago, the Tatas would have thought thrice about buying Corus or Jaguar Land Rover, the Birlas would have found it tough to buy Novelis and Bharti Airtel may not have bought Zain. All these deals would have had to pass through tedious government clearances.  Continue reading