Understanding the Liberalised Remittance Scheme (LRS) and Recent Trends
UPSC Relevance
Prelims: Indian Economy (External Sector - Balance of Payments, Capital Account Convertibility, Liberalised Remittance Scheme - LRS).
Mains:
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. The LRS is a key aspect of India's capital account management and external sector policies.
Key Highlights from the News
Outward remittances by Indians under the Reserve Bank of India's (RBI) Liberalised Remittance Scheme (LRS) decreased by 11% in July 2025 compared to the previous year.
The main reason for this decline is the reduction in remittances for travel, studies abroad, and gifts.
At the same time, remittances for purchasing immovable property abroad and investing in equity/debt increased.
Under LRS, an Indian citizen can send up to $2,50,000 abroad in a financial year.
This scheme is a crucial part of India's liberalisation policy regarding capital account transactions.
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