When you are busy cleaning up clutter, seldom is there time to go shopping. This explains why bank credit has slumped as Indian companies have been busy deleveraging their balance sheets.

Over the last five years, costly debt was paid off and fresh borrowing to was abstained from.

Ergo,bank credit to private non-financial firms grew at a five-year low pace of 9.3%, according to Motilal Oswal Financial Services Ltd.

According to analysts at the firm, corporate debt excluding financial firms was 46.8% of GDP as of September end, which is the lowest in the last thirteen quarters.

Companies haven’t thronged the bond markets either as analysts CLSA India Private Ltd have noted that bonds showed a growth of just 5% for September quarter.

Indeed, from car makers to windmill operators, firms have stayed away from debt because of uncertainty over future revenues. The focus is now to reduce inventory rather than build.

All this is likely to show in the GDP growth for September quarter, which the government will release later this week. Analysts’ estimates range from 4.2% to 4.5% which is lower than 5% print for the June quarter.

The pick up in economic growth depends on how fast Indian companies are back to borrow. For that the deleveraging process should be in its last leg.

But is it?

Despite the massive shedding of debt over the past five years, as a percentage of GDP, corporate debt is not far from what it was four years back. At 46.8% as of September, it is not very different from 45.8% in September 2015.

One explanation could be that several large firms are still undergoing insolvency process and resolution is slow. To that extent the debt is still on the balance sheets and banks have not got their cheques so far.

This means deleveraging is far from over. In fact, debt levels are likely to continue to fall if forecasts of bank loan growth are anything to go by.

For example, CLSA believes loan growth would be 10% for the next financial year.

In short, India’s economic growth slowdown could stretch as its businessmen continue shedding their debt.