How GST Ensured Fast Credit Growth To MSMEs

The Finance Ministry has expressed confidence that India's economy is poised to become the world's third largest within the next three years, with a projected GDP of USD 5 trillion, up from the current USD 3.7 trillion¹. India's consistent outperformance against market expectations has firmly established it as one of the fastestgrowing economies globally. The banking sector is integral to maintaining the country's stability, which is pivotal for economic growth. However, recent years have witnessed a significant decline in year-on-year (y-o-y) credit growth in India, largely attributed to the economic impact of the pandemic. Despite strong credit demand, deposit growth has not kept pace with loans, leading to a notable increase in the overall loans-to-deposits ratio.