Banks credit off-take in construction sector jumps 2500%

New Delhi, Nov 21 (UNI) Sectors like construction, personal loan and manufacturing witnessed an increase of over 2500 per cent, 1800 per cent and 295 per cent in credit off-take by commercial banks from 1998-2005.

Twenty seven commercial bank's credit disbursement which stood at Rs 1,105.9 crore for construction in 1998-99 went up to Rs 29,136.9 crore in 2004-05, showing a rise of over 2500 per cent, industry chamber Assocham said.

''With continued business expansion and lower interest costs, corporate profitability has improved significantly and there is an expansion in internal resources available for investment. These factors have found reflection in upbeat sentiments and a bright investment climate,'' said Assocham President Anil K Aggarwal.

The chamber in a study said that with rising per capital income and flexible bank loan facilities with favorable industrial climate, the rate of recovery for the credit disbursement that banks effected for construction activities has been satisfactory.

The credit off-take in personal loan segment went up to Rs 1,35,553.9 crore in 2004-05 from Rs 7,125.2 crore in 1998-1999, showing an increase of 1800 per cent.

The sub-segment housing which has claimed the highest share in total credit grew from Rs 5,383.9 crore in 1998-99 to Rs 1,09,359.6 crore in 2004-05.

Credit to manufacturing and processing which stood at Rs 27,196.6 crore in 1998-99 rose to Rs 1,07187.0 crore by March-end 2005, showing an increase of over 295 per cent.

The sub segment of manufacturing and processing, food manufacturing and processing increased to Rs 7,063.1 crore in 2004-05, compared to Rs 2,041.9 crore in 1998-99.

Credit to rice, flour and dal mills, which is also another sub segment of manufacturing and processing, increased from Rs 370.8 crore in 1998-99 to Rs 1107.0 crore in 2004-05.

The industrial sector also registered an increase in credit off-take from petroleum, coal products, power, roads and ports, cotton textiles, drugs and pharmaceuticals, gems and jewellery, iron and steel, other metal and metal products, automobiles and engineering.

Credit to construction recorded a robust growth in the total bank credit. Banks funding to this sector rose from Rs 1,105.9 crore in 1998-99 to Rs 29,136.9 crore in 2004-05.

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