BANK CREDIT GROWTH SLIPS TO SINGLE-DIGIT FIRST TIME THIS YEAR
Reflecting the deepening economic crisis arising from both structural and cyclical issues and a massive fall in consumption demand, bank credit growth rate, for the first time this fiscal, slowed to single digit at 8.8% to Rs 97.71 lakh crore during the fortnight to September 27, according the Reserve Bank of India data.
In the first fortnight of the fiscal ending April 12, the credit demand grew 14.19% after closing the previous fiscal at 13.24%.
Throughout this fiscal so far, credit growth has been in the low-double-digit.
On Thursday, global rating agency Moody's slashed its
GDP growth forecast to 5.8% from 6.2% earlier.
The downward revision came in after the first quarter GDP printed at a six-year low of 5% forcing a "surprised" RBI to massively slash its forecast by a full 80 bps to 6.1% within a span of just two months and by 140 bps from its April forecast.
Since the Q1 GDP, there has not been any positive data coming out, barring inflation, which remains tamed. Be it IIP numbers or exports or core sector data, everything has been heading south month after month.
On top of it, tax collections, both direct and direct, have also been sprinting down. While income tax collection during the first half just inched up 5% against a budgeted estimate of 17.5%, the all important GST collection has never touched the desired Rs 1-lakh-crore-mark barring in April.
Amidst all these negative news flows, the government has given away as much as Rs 1.45 lakh crore to the corporates by way of a massive reduction in corporate tax rates with retrospective effect from April 1, putting a big question mark on the government ability to meet the fiscal deficit targets of 3.3%.