India’s growth story continues to be region specific if the credit release is any indication

New Delhi, May 28 (KNN) India’s much hyped growth story is limited to some regions and may be completely unknown in populous states like Uttar Pradesh.

This emerges from the RBI’s report on state- wise credit release to industries.

The RBI report captures outstanding bank loan to industrial sector, state wise, which may be a reliable indicator for the industrial development and growth, in states, as credit is the lifeline for any economic activity.

The report shows that Maharashtra continues with its dominance in the industrial growth of the country.

As on 31st March, 2017, total outstanding bank credits to industries of Maharashtra was nearly Rs 9000 billion, almost 30% of the total outstanding Bank credits to industries at the all India level.

The points of more concern is big states like Uttar Pradesh could not even maintain the previous pace of industrial development, as the credit release to industries in the state came down by 20% over the last two year.

In fact, other state including the upcoming industrial states of Gujarat, Andhra Pradesh/ Telangana and Tamil Nadu are way behind Maharashtra in drawing bank loan for industry.

Each of these states could not reach even Rs. 3000 billion mark of outstanding credit to industry.

It speaks a lot about the ‘balanced industrial growth of the states of India.

In UP alone the outstanding credit is going down over the last 3 years; from Rs 1028 billion in 2015 to Rs 828 billion in 2017 March, a drop of nearly 25%.

Similar is the situation in Punjab. where the outstanding Bank loan is static for nearly 6 years.

And it may be reminded that the data includes credit offtake by large industries who take the lion’s share of industrial loan.

The situation is really bleak for the MSME sector often highlighted as the real creator of employment and leader in dispersion of industries to the rural and backward areas.

Another RBI database shows credit release to the MSME industries is almost stagnant for nearly two years with credit release to Medium industries, secularly going down. (KNN/ DB)