Gross bank credit to the industrial sector recorded a growth of 4.1% in October 2021 (YoY) compared to negative growth (-0.7%) in October 2020.
The share of industry in non-food credit stood at 26% in October 2021. Certain industries such as mining, textiles, petroleum, coal products and nuclear fuels, rubber, plastic, and infrastructure have shown consistent improvement in credit growth.
On the other hand, bank credit to services sector witnessed a slowdown on account of the lower growth in credit to tourism, hotel and restaurants, transport operators, and trade — retail as well as wholesale.
Economic Survey 21-22, released on Monday, observed that bank credit to the services sector, which had moderated significantly in 2019, started picking up in 2020, increasing to 8.8% at the end of December 2020, as compared to 6.2% in December 2019. However, this momentum has lost its pace in 2021-22. Bank credit growth decelerated to 3.6% at the end of November 2021 as compared to 8.2% a year ago.
Growth in bank credit picked up in computer software, shipping, and non-banking financial companies (NBFCs).