The Economic Survey 2024-2025 revealed several important aspects of the Indian Economy. The Economic Survey 2024-25 highlights a significant shift in India’s credit landscape, with Micro, Small, and Medium Enterprises (MSMEs) emerging as a key driver of credit growth.
The economic survey also highlights that personal loans and other segments showed more moderate expansion in the last fiscal year. This trend underscores the resilience of India’s MSME sector, which has been a cornerstone of the economy, contributing significantly to employment and GDP.
According to the Survey, MSME credit grew by 13% year-on-year (YoY) as of November 2024, whereas credit growth to large enterprises, stood at 6.1%. This robust growth in MSME credit reflects the sector’s increasing importance in India’s economic recovery and growth trajectory.
The government and the Reserve Bank of India (RBI) have played a pivotal role in facilitating this growth through targeted policy interventions and other measures to improve small businesses’ access to credit.
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The Survey also notes that the growth in personal loans, including credit cards and unsecured lending, has moderated to 8.8% as of November 2024. The RBI’s interventions have been effective in ensuring that credit growth remains sustainable and aligned with broader financial stability goals.
Sector-wise, the Survey revealed agriculture credit grew by 5.1%, and industrial credit picked up, registering a growth of 4.4% against 3.2 percent last year. The services sector, however, saw a slowdown in credit growth, particularly in lending to Non-Banking Financial Companies (NBFCs), which contributed to the overall moderation in credit growth to the services sector.
Vehicle and housing loans, key components of the personal loans segment, also saw a slowdown, reflecting the impact of higher interest rates and tighter lending norms. The Survey highlights that the credit-to-GDP ratio, a key indicator of financial health, has been steadily improving, indicating that India is entering a new credit upcycle.
This is a positive sign for the economy, as it suggests that credit growth is sustainable and aligned with the country’s economic growth trajectory. The narrowing gap between credit and deposit growth further reinforces this trend, with deposits growing at 11.1% year over year, keeping pace with credit growth.
In conclusion, the Economic Survey 2024-25 paints a promising picture of India’s credit landscape, with MSMEs leading the charge in credit growth. The moderation in personal loans reflects prudent regulatory measures aimed at ensuring financial stability.
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As India continues on its path of economic recovery and growth, the MSME sector is expected to remain a key driver of credit demand, supported by favorable policy measures and a resilient economic environment. Against this backdrop, India’s aim is not so far to become a developed country by 2047 with diversified growth in the sub-continent.
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