Assertion (A): Ceiling on foreign exchange for a host of current account transaction heads was lowered in the year 2000.
Reason (R): There was a fall in foreign currency assets also.
A
Both A and R are individually true, and R is the correct explanation of A
B
Both A and R are individually true, but R is NOT a correct explanation of A
C
A is true, but R is false
D
A is false, but R is true
Correct Answer: Option D
Explanation
1. Assertion (A): In the year 2000, India's foreign exchange reserves were growing significantly, leading to liberalization of foreign exchange norms under FEMA (Foreign Exchange Management Act, 1999, replacing FERA). Limits for various current account transactions (like travel, education abroad, remittances) were generally *raised* or eased, not lowered, reflecting the comfortable forex position. (False)
2. Reason (R): India's foreign currency assets saw a substantial increase during this period, not a fall. Growing software exports, remittances, and capital inflows contributed to this rise. (False)
3. Both the Assertion and the Reason are false.