~ 497 ~    ISSN Print: 2394-7500 ISSN Online: 2394-5869 Impact Factor: 5.2 IJAR 2016; 2(4): 497-500 www.allresearchjournal.com Received: 24-02-2016 Accepted: 22-03-2016 Dr. VB Khandare Associate Professor Department of Economics, Shir Asaramji Bhandwaldar College, Deogaon Rangari, Dist. Aurangabad. Correspondence Dr. VB Khandare Associate Professor Department of Economics, Shir Asaramji Bhandwaldar College, Deogaon Rangari, Dist. Aurangabad. Role of India's monetary and fiscal policy in global economic slowdown Dr. VB Khandare Abstract This paper attempts to examine the effectiveness of monetary and fiscal measures taken by Indian Government to counter the effects of global economic slowdown on Indian economy. Looking at global economic slowdown to augment domestic liquidity and to ensure that credit continues to flow the productive sector of economy Reserve Bank had reduced CRR from 9.0 percent to 5.0 percent, SLR 25.0 percent to 24.0 percent, Repo Rate 9.0 percent to 4.75 percent and Reverse Repo Rate 5.0 percent to 3.25 percent from July 2008 to July 2009. Fiscal policy of 2008-09 cuts the excise duty, customs duty and service tax to increase the demand of industrial goods. Keywords: Monetary Policy, Fiscal Policy, Economic Slowdown Introduction The global financial crisis is into its third year now. Many have termed it the worst financial crisis of the last century. The current global financial crisis that started in the US sub-prime sector and broader financial markets is deepening and spreading throughout the world, turning now into a full-blown global economic crisis. While the intense focus of governments has mostly been on dealing with the short-run fall out of the worsening crisis, policymakers, economists and the general public are also beginning to turn their attention to financial regulation in an attempt to figure out what went wrong and how to prevent such a crisis from occurring again. The purpose of the present paper is to examine the effectiveness of monetary and fiscal measures taken by Indian Government to counter the effects of global economic slowdown on Indian economy. There is a widespread perception that India along with other emerging market economies has been the victim of relentless globalization in general and the excess of financial institution in advanced countries in particular. The world economic crisis, let us recall, first surfaced in the US sub-prime mortgage market in August 2007, soon spread to markets for other securities in both the US and elsewhere, and in the process caused, within a few months, a huge financial meltdown, a string of bankruptcies and a sharp economic slowdown in practically all industrialized countries (Mihir Rakshit, 2009) [1] . The fiscal stimulus packages mounted by governments across the world of the organization of Economic Cooperation and Development are of unprecedented size. But when forecasts made one week are routinely torn up the next, it looks as though optimism can only rest on complacency or ignorance (Paul Krugman, 2009) [2] . Global Prospects and Policy during crises period The global financial and economic crisis keeps getting worse. A couple of weeks back the giant city bank had to be bailed out with several hundred billion dollars in cash and guarantees from the US authorities. In July 2008, the IMF foresaw stated that the world economy growing at 3.9 percent in 2009, advanced economies at 1.4 percent and developing countries at 6.7 percent. April 2009 IMF forecasts had been slashed down to minus 1.3 percent, minus 3.8 percent and 1.6 percent respectively. For the Asian giant, China, both the IMF and UNCTAD expect growth to slow to about 8.5 percent in 2009 from the scorching 12 percent pure of 2007. Interestingly; several china- based analysts foresee much sharper deceleration. International Journal of Applied Research 2016; 2(4): 497-500