Following fiscal measures are recommended to correct deficient demand :
The government should step up its expenditure on public work programs ,education and public welfare .Also government should give subsidies to the producers ,defense and law & order sector . Higher government expenditure acts like an injection into the circular flow of income in the economy.
The government should reduce tax burden on the households, so that they are left with greater cash balances. Higher cash balances with the people lead to higher level of AD.
The government should raise more funds from the RBI so that there is greater flow of liquidity in the economy .Higher liquidity implies higher level of AD.
The government should plan a cut in public borrowing ,so that people are lift with greater liquidity .Greater cash balances implies higher AD.
Briefly, deficient demand is corrected when the government steps up its own expenditure and ensures that cash balances with people are raised .