COVID-19 lockdown: Retail credit drops to lowest level since 2008

New Delhi

On the deposit growth front, it has been a mixed bag, but the extension of the lockdown for a fifth time will ensure that the savings continue to surge, the economists said in a note.

Consumer confidence is a deeply-cherished aspect by policy makers because it is the primary driver of growth in the Indian economy for many years now. Even during the COVID-19 pandemic, there has been a lot of commentary about the need to revive confidence and consumer demand.

Retail credit declined by 2.5 per cent, the lowest level since 2008, from when the data series started, it said, expecting that the decline will continue as Maharashtra has extended the lockdown till June 30.

The increase in cash credit during the fourth lockdown is more than Rs 52,000 crore, the economists said, pointing out that this can be because of accrued interests in moratorium turning into loans. On the deposits front, there was a surge of Rs 4.83 lakh crore during the first lockdown and Rs 3.62 lakh crore in the second lockdown, which is indicative of “significant risk aversion in consumer spending,” the note said.