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Q11: The "Liberalised Remittance Scheme" (LRS) allows residents to remit a certain amount of money abroad annually, for permitted purposes, without seeking case-by-case approval. What FEMA principle does this illustrate?

A
The principle of Total Prohibition, (all forex is banned unless approved).
B
The principle of General Permission, (routine transactions are allowed within limits without specific approval).
C
The principle of State Monopoly, (only the government can send money).
D
The principle of Unlimited Convertibility, (there are no limits on any transaction).
✅ Correct Answer: B
FEMA operates on a management philosophy rather than a control philosophy. "General Permission" means that for specific categories of transactions (like those under LRS), the RBI has given a blanket approval subject to certain limits and conditions.
Individuals do not need to approach the RBI for specific permission for every single transaction, provided they stay within the "General Permission" guidelines.
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