Muted Profit Growth, Falling Retail Ownership, Improving FDI and More...

In FY 2010-11 the share of consumer credit in total bank credit was only 19%. By FY2023-24 this increased to around 33%. Nearly half of this credit is unsecured or quasi-secured (secured against weak collateral), which makes it riskier. In the post-pandemic period, much of the growth in bank credit has in fact been driven by growth in consumer lend

... See more

Real private final consumption expenditure has been averaging at 3.5-4 per cent over the past five years despite the exuberant leveraged spending. And while the contraction in financial savings was seen as a sign of improving household confidence, it ironically accompanied a languid actual consumption, indicating faltering real incomes.

Indeed, the

... See more

Overall, these trends suggest a very significant shift in the credit landscape. Credit seems to be moving from the supply side (businesses) to the demand side (consumers) of the economy. Considering the state of economic development of India and the relatively low level of per capita GDP, this move appears to be premature. Even within consumer cred

... See more

This may have also been due to consistently weak credit demand from the industry. After years of sluggish performance, private sector investment still has not picked up in a substantial manner. It is true that within industry, bank credit to medium industry grew at almost 20% and that to small industry at around 13%, but this was primarily driven b

... See more

So what is camouflaged by the robustness of corporate situation, and well capitalised banks is the persistently stressed Indian households whose income constitute 78 per cent of India’s GDP. The other dimension of this stress is that the burden of fiscal consolidation from a high level of public debt, estimated at ₹270 trillion or 90 per cent of GD

... See more