Non-Food Credit is used to measure how much bank lending is going to sectors other than government food procurement operations. It is an important indicator of real economic activity and private sector demand for loans.
Non-Food Credit : Non-Food Credit = Total bank credit – Food credit
It refers to loans given by banks to sectors like:
Non-Food Credit means bank loans to the productive economy excluding loans given for food grain procurement by the government.
Food credit is the loan banks give mainly to agencies such as: Food Corporation of India (FCI), State procurement agencies. These loans are used to: Purchase wheat and rice from farmers at MSP, Store food grains, Maintain buffer stock for food security programs.
Since these loans are linked to government procurement operations, economists separate them from normal economic lending.
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