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Just six sectors have accounted for 96.5% of the growth in non-food bank credit so far this fiscal year. The chart shows that loans to housing accounted for almost a third of the increase in non-food bank credit. That’s far more than the increase in credit to industry, which is just 11,100 crore.

Contrast the rise in total personal loan outstandings, which is 1,38,300 crore, or 58.4% of the total increase in non-food credit.

This lopsided growth in bank credit indicates a similar skewed growth in economy. The growth in personal loans is shoring up consumption on the back of interest rate cuts, while the lack of growth in credit to industry shows the lack of investment demand. Within industry, the fact that loans to the struggling power and iron and steel have gone up may not be a good sign.

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