Credit growth in exports, shipping, farm mark uptick in sentiment: ASSOCHAM
Export credit grew by a handsome 32 per cent in the current financial year , helped by a smart recovery in the global demand, also leading to an upturn in shipping, an ASSOCHAM Paper has said.
Analysing the RBI data, the paper noted that in the current financial year, up to January 20, some of the selective sectors remained in good shape despite an overall dismal credit growth of just about 3.3 per cent in 2016-17.
Going by the sector-wise deployment of gross bank credit, exports, agriculture and allied activities, shipping, professional services, consumer durables and vehicles were among the top in seeking funds from the lenders.
While the year –on-year export credit grew by 32 percent as on January 20, 2017 (the latest RBI data), shipping saw higher deployment of funds by 15.7 per cent , consumer durables by 17.1 per cent, and vehicles loans by 18. 2 per cent.
“There are pockets of growth which are keeping the economy on track. This includes agriculture and allied activities (other than food credit) which saw a higher bank credit demand by over eight per cent. The improvement in shipping shows an upward movement in global trade, which is reflected in the smart recovery in the Indian merchandise exports in the current fiscal,” said ASSOCHAM Secretary General Mr D S Rawat.
Even as exports grew by a cumulative 2.52 per cent between April-February this fiscal, the expansion has been quite sharp in the later part of the year and in certain specific sector like engineering. For the 11-month period, India’s merchandise exports aggregated USD 245.41 billion against USD 239.37 billion in the same period last fiscal.
The exports fall under the ‘Priority sector’ lending norms of the banks, adds ASSOCHAM.
“Surely, things are further improving for the export sector and so is the demand for money,” the paper pointed out. Services as a key contributor to the Gross Domestic Product also did well in terms of deployment of credit which saw over eight per cent year on year rise for the period under review.
However, the manufacturing still remains a laggard, witnessing a de-growth of about seven per cent in bank credit deployment. So is the case with other sectors like non-banking finance companies and micro credit. Most of the Non-Performing Assets are locked up in manufacturing in sectors such as steel, besides some infrastructure segments.
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