Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the fiscal stimulus package unveiled by the government was "adequate" and the next package should aim at creating productive investments in infrastructure.

"Our package works out to about one per cent of GDP, which is comparable with China's package for this year which is around 1.35 per cent of GDP, though it is a more open economy," he said. "It is no longer a three- or four-month game, we need to now plan for the next 18 months."

Ahluwalia was referring to recent steps by the government and the Reserve Bank of India [Get Quote] to boost the sagging economy. These include infusion of liquidity into the money markets, easing of export curbs, cut in central excise by four percentage points and concessions on home finance. Industry captains have, however, said these measures are not enough to put the economy back on track.

Ahluwalia was speaking at a panel discussion on the release of Business Standard India 2009, a book which takes a look at the vital issues that confront the country today.

The banks, Ahluwalia added, had absorbed the additional liquidity pumped in by RBI but are not lending further because of the elevated risk perception. "But the global financial situation has begun to stabilise. Things will return to normal by the middle of 2009," he said.

Speaking at the function, Saumitra Chaudhuri, a member of the prime minister's economic advisory council, said things would be back to normal by 2009-10.

Rajya Sabha Member and former RBI Governor Bimal Jalan said there was a complete disconnect between the growth in the real economy and the way the stock market was behaving, which needed a correction. "The real economy was growing at 13-14 per cent including inflation, and the markets were growing at 80 per cent! We need a market that works, not one that dreams."