I will then speculate why economic evidence finds it so hard to prevail in the public debate, not just in India but elsewhere in the world. Public sector lending vs private sector lending Let us start by looking at public sector bank credit growth compared with the growth in credit by the new private banks.
As the trend in non-food credit growth shows (Chart 1), public sector bank non-food credit growth has been falling relative to credit growth from the new private sector banks (Axis, HDFC, ICICI, and IndusInd) since early 2014.