- It is observed that Bharat has turned out to be the bright spot for banks, which showed double-digit growth in both credit and deposits in the Rural Areas in the April-June (or the first) quarter of 2020-21 vis-a-vis year ago period.
- This growth came even as the larger economy contracted 23.9% in the first quarter as the COVID 19 lockdown had shut to kye economic engines viz Industry and Service Sectors.
- Agriculture was the sole bright spot. This is in turn reflected in the aggregate bank deposits and credit for the Rural Population group growing 14% in Q1 FY21 (11.5 percent in Q1FY20) and 10.5 percent (13.8 per cent), respectively.
- Population groups In the case of other population groups — semiurban, Urban and Metrotropolitan — while the aggregate deposit growth was in double digits, credit growth slipped to single digit.
- Among underlying indicators, tractor sales picked up by 38.5% in July drove by the robust pace of kharif sowing, while the shrinkage in motorcycle sales eased in July (from 35.2 per cent in June to 4.9 per cent in July), the report said.
- Aggregate deposits and bank credit growth of the semi-urban population group in the first quarter were at 13.1 per cent (10.2 per cent in Q1FY20) and 8.1 per cent (12.3 per cent), respectively.
- For the urban population, the figures were, 12.5 per cent (9.6% in Q1 FY20) and 8 per cent (10.9 per cent), respectively. For the metropolitan population group, they were at 10 per cent in Q1 (unchanged vis-a-vis Q1FY20) and 5.1% (11.5%) respectively.
- The Report Assessment reads as under:
“Considering the small farm size in India, the self-employed in agriculture can be assumed to be relatively unscathed by the pandemic. On the other hand 40% of casual labourers in rural areas are employed in the construction sector, which has come to a complete half during Lockdown”.