part 3: what could India/world do to avoid a deep recession?

• Continuing on the above theme,The article by Shri N K Singh referred to earlier makes a interesting suggestion of increasing pace of lagging public investment programme .So after all there is some merit in the inefficiency of public investment programme- govt could improve efficiency of public investment programme and hence check recession without increasing fiscal imbalance. Such budgeted but unutilized resources could be significant
• With several economies gearing up for a rate cut, what could bolster these measures is a limited time “sovereign” guarantee that Central Banks/Govt could provide to banks lending to companies that meet certain financial criteria. This will considerably take out fear prevailing in the lending community and add more power to interest rate cuts etc. Govt in effect could be working like a part time insurance company and even make a neat profit by sharing part of interest income in return for taking over part of lending risk.
  
• To lend stability to stock markets, governments could encourage hybrid of closed and open ended mutual funds by requiring higher dividend share to those opting for closed ended mutual funds in effect taxing open ended MF investors to compensate holders of closed ended MFs who would be imparting more stability to markets in case of crash and cutting down on panic selling.
  
• Bailout by US has serious dissenters particularly those who have to pay for fault for errors of others. Is it not possible to devise penal taxes that bailout beneficiaries will be required to pay once they regain financial health that will somewhat imperfectly compensate those taking over bailout burden?