India Inc is in a very busy credit season

The offtake of non-food credit increased by Rs 1,76,496 crore (Rs 1,764.96 billion) year on year on October 1, 2004. This was the highest credit growth in the first half of a fiscal year in the last decade, bankers said. Data available on the Reserve Bank of India website since 1997 do not have a parallel.

In the previous corresponding six-month period, non-food credit increased by Rs 92,330 crore (Rs 923.30 billion). The total outstanding non-food credit now stands at Rs 8,97,267 crore (Rs 8,972.67 billion).

In the first six months of the current fiscal year, non-food credit increased by Rs 86,601 crore (Rs 866.01 billion), again a record growth in recent times. In the first six months of 2003-04, the growth was almost a third of this, at Rs 33,264 crore (Rs 332.64 billion).

Bankers pointed out that the robustness in the economy was driving up corporate investment. They also see a massive pipeline being built for investment. This essentially means that the growth in non-food credit is sustainable and will go up.

ICICI Securities vice-president Sanjeet Kumar Singh said the persistence in the robust growth of non-food credit "reflects the strength in the economy in the last 12 months". The economy grew 7.4 per cent in the first quarter of 2004-05.

ICICI managing director and CEO KV Kamath had said last month that the top 300 manufacturing companies had plans to invest Rs 200,000 crore (Rs 2000 billion) over the next two years, most of it in expansion projects. Kamath said, "We have not seen anything like this in the past."

In 2002, non-food credit had similarly spurted, with the year on year rise on September 27 being Rs 121,049 crore (Rs 1210.49 billion) versus Rs 44,582 crore (Rs 445.82 billion) in the 12-month period ending September 28, 2001.

The year on year rise in non-food credit on September 24, 2004, was Rs 1,79,321 crore (Rs 1,793.21 billion). It was Rs 87,635 crore (Rs 876.35 billion) on September 26, 2003.

The comparable figures of the earlier years were: Rs 1,21,049 crore (Rs 1,210.49 billion) on September 27, 2002; Rs 44,582 crore (Rs 445.82 billion) on September 28, 2001; Rs 78,991 crore (Rs 789.91 billion) on September 29, 2000; Rs 43,251 crore (Rs 432.51 billion) on September 24, 1999; Rs 41,222 crore (Rs 412.22 billion) on September 25, 1998 and Rs 25,771 crore (Rs 257.71 billion) on September 26, 1997.