The economic survey has said that the government should take measures to ensure increase

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in credit offtake, including retail loans, if it decides to rollback of its stimulus measures for the economy.

“It would be necessary to monitor these indicators (the credit growth indicators) for an improvement in credit growth, while sequencing measures to roll back the stimulus,” the survey has said

The survey said the slowdown has been most felt in the retail loan segment. “The personal loans category has fared the worst with credit deployment showing negative variation for subcategories like advances against fixed deposits (-11.8 per cent), credit card outstanding (-24.7 per cent) and consumer durables (11.8 per cent),” the survey said. The figures compare the deployment of bank credit year-on-year as on November 20, 2009 compared with the same period the previous year.

Overall, retail credit growth has witnessed a sharp dip during the financial year 2010. The personal loan segment, which reported a growth of 13.2 per cent till November 20, 2008, has recorded a sharp deceleration in the credit growth of 0.7 per cent on November 20, 2009.

The survey has pointed out that the demand for bank credit/non-food credit has also remained muted during 2009-10. However, some pickup has become evident from November 2009, it says. Abheek Barua, chief economist, HDFC Bank, agreed there has been some pickup in demand. “We are seeing credit demand picking up. There has been substantial increase in the auto loan segment in past few quarters. In the unsecured loan segment, the growth is slow but gradually it is also picking up,” Barua said.