Agricultural Credit Growth Slows Sharply Amid Lack of Clear Policy Direction

New Delhi: The Reserve Bank of India has confirmed a significant decline in the growth rate of credit to agriculture and allied sectors. According to data for the fortnight ending April 18, 2025, the year-on-year loan growth in this segment dropped to 9.2%, compared to 19.8% during the same period last year. The total outstanding loans to agriculture and allied sectors stood at Rs 23.09 lakh crore.
A slowdown is also visible in the growth of non-food credit. From 15.3% in the corresponding period of the previous year, it has now declined to 11.2%.
However, gold loans witnessed a sharp rise. The amount of credit under this category jumped by 119.6%, rising from Rs 1.01 lakh crore last year to Rs 2.23 lakh crore by April 2025. Analysts attribute the surge to increased demand for quick-access personal finance amid inflation and stagnant rural incomes.
Credit growth to the industrial sector slipped marginally to 6.7%, down from 6.9% last year. Loans to the industrial sector amounted to Rs 38.83 lakh crore. Credit to the services sector, which had recorded a growth of 19.5% during the same time last year, dropped to 11.2% this year.
The infrastructure segment, which forms a key part of services credit, also registered a fall in loan growth, signaling subdued investment activity across key development sectors.