Ms. Prabha, a Bharatanatyam classical dancer, wishes to perform in the USA and requires foreign exchange drawal of US$ 75,000. Explain the relevant…

Provisions: Under the FEM (Current Account Transactions) Rules, 2000, drawal of foreign exchange for a cultural tour, whether by a performing artist, a dance/music troupe, or a film personality requires the prior permission of the Ministry of Human Resource Development (Department of Education and Culture), Government of India, as specified in Schedule II to these Rules. Analysis: In the present case, Ms. Prabha wishes to draw US$ 75,000 for her Bharatanatyam performance in the USA. Since this constitutes a cultural tour by a performing artist, she is required to obtain prior approval of the Ministry (Department of Education and Culture) before drawing the foreign exchange, regardless of the amount involved. Mere facilitation or approval by an Authorised Person (bank), as defined under Section 2(c) of the FEMA, 1999, is not sufficient on its own. The Ministry's clearance is a mandatory pre-condition specific to this category of transaction. Conclusion: Ms. Prabha must first obtain approval from the Ministry (Department of Education and Culture) before she can draw the US$ 75,000 foreign exchange for her Bharatanatyam performance in the USA.