The sharp recovery in industrial credit from banks in the first half of financial year 2022-23 (FY23) appears to have tapered off, as year-on-year growth declined to a 12-month low of 7 per cent in February, according to Reserve Bank of India data.
For comparison, industrial credit grew at a decadal high of 13.6 per cent YoY in October. The growth in the first half of FY23 had raised hopes of a revival in private sector capital expenditure, which had been in the slow lane for nearly a decade.
The slowdown in industrial credit was much sharper than the slowdown in overall non-food credit, which continued to grow in double digits at 15.9 per cent YoY in February. This was marginally lower than the 16.7 per cent YoY growth seen in January, and the decadal high of 17.1 per cent in October.
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