RBI’s CDR guidelines attempt to strike a balance between these two approaches by requiring both the debtors and creditors to make sacrifices and by requiring the promoters to increase their stake in the form of guarantee or equity. However, these norms have been circumvented to some extent.
The less-than-severe impact of the global recession on the country’s economy vindicated the importance of good economic and financial governance over the years. Without the careful and prudent budgetary and overall management of the country’s resources, it would not have been possible to implement the fiscal stimulus that moderated the severity of job losses.