According to the latest industrial outlook survey of the Reserve Bank of India (RBI), the business expectations indices based on assessment for October-December 2007 and on expectations for January-March 2008 declined by 2.5% and 4.7%, respectively, over the previous quarters.
"The decline in expectations index for January-March 2008 emanated from lower net responses for major parameters of the survey such as the overall business situation, availability of finance, production, order books, capacity utilisation, employment, exports and profit margins over the previous quarter," RBI said in its report on macroeconomic and monetary developments ahead of the credit policy review tomorrow.
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"Disaggregated sectoral data available up to November 23, 2007 show that about 43% of incremental non-food credit (y-o-y) was absorbed by industry as compared with 34% in the corresponding period of the previous year. The expansion of incremental non-food credit to industry during this period was led by infrastructure (power, port and telecommunication), iron and steel, textiles, engineering, food processing, vehicles, petroleum, chemicals and construction industries.
The infrastructure sector alone accounted for over 28% of the incremental credit to industry as compared with 18% in the corresponding period of the previous year. The agricultural sector absorbed around 12% of the incremental non-food bank credit expansion. Personal loans accounted for nearly 23% of incremental non-food credit as compared with 29% a year ago; within personal loans, the share of incremental housing loans stood at 40%. Growth in loans to commercial real estate remained high, notwithstanding some moderation," the report said.
Source: Business Standard
