New Delhi, Jan. 30 -- Debates on the significant decline in India's GDP growth rate in the second quarter of 2024-25 and the revised estimates of growth for the year have been all over the media. The narratives have ranged from it being a secular decline to just a quarterly blip. Pundits have volunteered diagnoses and prescriptions accordingly. However, the trend of slower credit growth has received little attention; the why of it, even less so.

Credit growth as on 15 November was just 15%, compared to 20.6% last year. In fact, in the month of October 2024, rural credit slowed from 13.4% to 12.9%, non-food credit from 13% to 11.5%, industry credit from 8.9% to 7.9% and non-bank financial company advances from 9.5% to 6.4%. Credit growth ...