Second, there will have to be more definite signs of recovery. The Reserve Bank will maintain an accommodative stance until demand conditions improve and credit flow takes hold, but reversing the expansionary policies is definitely on the agenda on the way forward. Having explained the Indian context in some detail, let me now return to the global scene.
The seventy odd years since the Great Depression saw a famous rivalry between fiscal and monetary policies for influence. The crisis has shown that both are required, and that indeed both are critical for macroeconomic stabilization. It is unlikely that we will revert to status quo ante once the crisis has passed.