The main objective of the government now is to implement counter-cyclical measures that will help mitigate the affect of a global meltdown on India. In fact, the prime minister himself heads the apex group set up in the first week of November this year to address the concerns of India Inc, whish is reeling under the adverse impact of the global financial crisis that is now effecting India.

After maintaining a healthy clip of an average 9 per cent growth rate in the last four years, the gross domestic product (GDP) growth has slowed down to 7.9 per cent in the first quarter of 2008-09 and further to 7.6 per cent in the second quarter.

With inflation dropping to 8.93 per cent and expected to fall

further, the Reserve Bank of India is likely to consider a more aggressive easing of its monetary policy. This could mean a further cut in the repo rate (the rate at which the apex bank lends to banks) that stands at 7.5 per cent now and further reduction in the cash reserve ratio (the portion of deposits that banks have to keep with the Reserve Bank) from the present 5.5 per cent.