It also creates a certain, albeit imperfect, degree of predictability for market participants, which enables them to accumulate inventories in order to satisfy our demand. Finally, the Eurosystem’s presence in the market will not be erratic, but smooth and consistent over time, which should further preserve orderly markets and mitigate excessive short-run volatility.
In order to achieve sustainable fiscal correction and consolidation, both the central and state governments have adopted fiscal responsibility legislations i.e., Fiscal Responsibility and Budget Management (FRBM) Acts. The combined fiscal deficit of the centre and states is budgeted to come down to about 6.5 per cent by 2007 (Table 4).