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The second leg of stimulus was announced by the Government of India on 2nd January 2009. This package was to assist the measures taken in the first one with a long term development focus. The highlights of this stimulus package are as follows:

The measures outlined above taken together with steps taken earlier constituted a substantial counter-cyclical stimulus in the current year. The Government was well aware that the measures required to provide an economic stimulus to the economy had to extend beyond the financial year 08 - 09.

In February 2009 Finance minister Pranab Mukherjee announced the third leg of stimulus package. The package cut excise duty and service tax two percentage points each. Service tax has been cut across the board from 12 per cent to 10 per cent and the excise has been reduced by the same margin only for items that currently attract the 10 per cent rate.

Most other major economies took drastic measures to reduce the effects of the downturn. A comparison of the measures taken by the countries has been given in the Appendix 1. Almost all major countries have depended on increased governmental expenditure to provide a thrust to the falling GDP’s and economic health.

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* Contributed by: -
Madhav Kumar Sharma, is a student of MBA at NMIMS, Mumbai. His specialization is in Finance. Before joining NMIMS, he had four years of work experience in the merchant navy as an Engineer Officer. His interests include finance and economics.