THERE IS some panic about the falling rupee in a section of Delhi, the country’s capital, which makes policy. Such nervousness generally gets amplified when transmitted to Mumbai, the city which makes and regulates financial markets. A week or ten days back, a discussion paper by the Reserve Bank of India captured this phenomenon just perfectly: to address Delhi’s anxieties, the RBI proposed ideas to control dollar outflows, which did well only to alarm everyone.

The RBI is learnt to have proposed disallowing resident individuals from sending money abroad for buying real estate and shares, overseas direct investment, opening bank accounts, and giving loans to NRI relatives under the Liberalised Remittance Scheme (LRS).…