INDIAN ECONOMY

1.The liquidity should be expanded to facilitate the banks to follow suit.
2.Banks and non-banking financial companies will have  more cash to lend as the repo rate cut will infuse much needed liquidity
3.Corporate loans too are set to get cheaper and hence the expected disbursement of the loan will increase.
4.Higher Government spending leads to inflationary pressures and the rate cut aims to drain money markets of excess liquidity.If surplus liquidity prevailed for some months chances of banks lowering lending rates will be fully accomplished.