The measures undertaken by the Reserve Bank during September 2008 – July 2009 have resulted in augmentation of actual/potential liquidity of Rs. 5, 61,700 cr. The fiscal stimulus measures, undertaken in December 2008 and January 2009, included additional public spending as well as cuts in taxes.
These stimulus packages came on top of an already announced expanded safety-net for rural poor, a farm loan waiver package and salary increases for government staff, all of which too stimulated demand. Taken together, the fiscal and monetary measures were successful in achieving their objectives. Financial markets and the banking sector began to function normally.