In charting a roadmap for fiscal consolidation, we also need to be mindful of the quality of fiscal adjustment – which is to weed out unproductive expenditure and protect, if not enhance, growth-promoting expenditure. 56. The second task is to bring inflation down first to 5 per cent, and then even lower, consistent with India’s broader integration into the global economy.
In fact based on an internal study, we find that on aggregate basis the banks are in a position to maintain LCR of around 80 per cent (as against the current requirement of 60 per cent) with the present carve-out of 7 per cent of SLR which is permitted to be reckoned as Level 1 HQLA (Chart 3).