Mumbai/New Delhi (NVI): India may have emerged as a global bright spot in an otherwise gloomy economic scenario across the world despite IMF projecting a lower growth rate of 6.1 per cent for this fiscal, but the negative trend at home continues to bog it down. In the latest bad news, commercial credit demand in the country has contracted 2.6 percentage points to Rs 63.80 lakh crore in the June quarter over the three months to March period. This was accompanied by a steep deterioration in asset quality, on official survey report said.
A joint survey report by the state-run Sidbi and Transunion Cibil said recently that the contraction has been across all the four segments of the commercial credit segment, including micro, small, medium, mid and large enterprises.
What is more worrying for policymakers is the fact that the slowdown comes after a sustained quarter-on-quarter steady growth in commercial credit demand over the past few years on one hand and on the other the quantum of non- performing assets surged across all the four segments despite the lower base.
The depressing dataprints come in at a time when growth has slipped to a six-year low of 5 percent in the June quarter as the private sector is averse to invest in new capacities as they are already saddled with under-capacity utilisation due to falling consumer demand.
Overall commercial credit stood at Rs 63.80 lakh crore as of June 2019 as against Rs 65.52 lakh crore in March 2019 and is up 10.4 percent compared to Rs 57.81 lakh crore as of June 2018.
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