BackCommercial sector: flow of funds falls in first four months of FY17
We will know soon enough whether this slowdown is reflected in the GDP data for the first quarter
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That the economic recovery continues to be tepid is seen from the fact that the flow of financial resources to the commercial sector—from banks as well as non-banking sources—so far this fiscal year has been well below that of the same period last year.
The chart, from the Reserve Bank of India’s (RBI’s) annual report, has the details. It’s likely that net credit by housing finance firms and inflows from foreign direct investment would rise somewhat this year, as the data is available only up to May.
Nevertheless, the shortfall is unlikely to be bridged. As the RBI annual report says, “The early months of 2016-17 indicated a slowdown in both bank and non-bank funding for the commercial sector." We will know soon enough whether this slowdown is reflected in the GDP (gross domestic product) data for the first quarter of the current fiscal year.
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