Module: General Practice
Q80: Following the amendments by the Finance Act, 2015 (effective October 2019), who holds the power to frame rules regarding "Non-Debt Instruments" (e.g., Equity, FDI)?
✅ Correct Answer: B
The Central Government.
Concept Definition: The "Non-Debt Instruments" (NDI) Rules govern equity investments, FDIs, and FPIs.
Structural Breakdown: The 2015 Amendment created a Jurisdictional Split in Section 6: Non-Debt Instruments (NDI): Regulated by Central Govt (via Rules). Debt Instruments: Regulated by RBI (via Regulations). Historical Context: Prior to October 17, 2019, the RBI regulated almost all Capital Account transactions.
The Finance Act 2015 shifted the policy control of "Equity/FDI" to the Central Government to align with the country's strategic foreign investment policy, leaving "Debt" (which impacts monetary stability) with the RBI.
Concept Definition: The "Non-Debt Instruments" (NDI) Rules govern equity investments, FDIs, and FPIs.
Structural Breakdown: The 2015 Amendment created a Jurisdictional Split in Section 6: Non-Debt Instruments (NDI): Regulated by Central Govt (via Rules). Debt Instruments: Regulated by RBI (via Regulations). Historical Context: Prior to October 17, 2019, the RBI regulated almost all Capital Account transactions.
The Finance Act 2015 shifted the policy control of "Equity/FDI" to the Central Government to align with the country's strategic foreign investment policy, leaving "Debt" (which impacts monetary stability) with the RBI.