The non-food credit loans increased by 8.8% in November 2017 vis-à-vis 4.8% in November 2016, while October 2017 saw an increase of 6.6% in the non-food bank credit, according to Reserve Bank of India.
Most importantly, while the advance to industry was down by 3.4% in November 2016, this year saw an increase of one percentage point. As per the data revealed by the RBI, loan off take by small and micro industry in November 2016 saw a decline of 7.7% last year, while in November 2017, it increased by 4.6%. The industry saw a deep rise from Rs. 15700 crore in November 2016, to a whopping Rs. 359200 crore in November 2017.
Following the demonetization move by the Prime Minister in November 2016, thousands of small units across India were in dire state, with several of them forced to shut down their operations. The result was that these units defaulted on their loan repayment. As such, while the loan off-take of big industry increased by 0.8%, the small and micro industry loan off-take dipped by 2.3% in November 2016.
Meanwhile, the loan off take by medium scale industries continued with its declining trend, registering a decrease of 8.3% against the decrease of 10.1% in the previous year. In the agricultural sector, the loan off showed an increase of 8.4%, however, this was lower than the previous year figures, which stood at 10.3% in 2016. As against this, the personal loan increased from 15.2% in 2016 to 17.3 in 2017. The overall credit outstanding stood at Rs. 26,04,100 crore in November 2017.
RBI says that while sectors including infrastructure, transport equipment, vehicles and vehicles spares, basic metal, metal products and mining saw a decrease in credit demand, segments such as textiles, chemicals, engineering, construction and food processing witnessed an increase in credit off take.