Reserve Bank’s efforts to contain the Rupee volatility in turn resulted in large Rupee liquidity which had to be sterilised at considerable fiscal cost lest inflationary pressures became unmanageable. In the circumstances, the regulatory framework discouraged borrowing by Indian companies. I don’t need to amplify that this measure was in the greater interest of the economy including that of the companies.
More in general, and this is my third point, models with heterogeneous agents allow for a deeper understanding of the effects of aggregate uncertainty as well as its interactions with idiosyncratic uncertainty and non-linearities, such as the presence of an effective lower bound for interest rates.