Making liquidity available in sufficient quantity, as RBI has done, should also help by giving confidence to banks of the availability of funds. Looking ahead – fiscal policy The challenge for fiscal policy is to balance immediate support for the economy with the need to get back on track on the medium-term fiscal consolidation process.
The fiscal stimulus packages and other measures have led to sharp increase in the revenue and fiscal deficits which, in the face of slowing private investment, have cushioned the pace of economic activity. BIS Review 63/2009  3  The first order of economic business for the new government will be the full budget.