Economists raise concerns as India's growth increasingly becomes credit expansion-led

India's economic growth has accelerated recently, driven by a significant rise in bank credit. This growth is increasingly becoming credit expansion-led, which means it is largely fueled by borrowing rather than by an increase in productivity or exports. Economists are concerned about the sustainability of this growth, as it may lead to inflation pressures and make the economy more vulnerable to external shocks.

Why it matters

India's economic growth is driven by credit expansion, which may not be sustainable. This could lead to a slowdown in growth if credit expansion slows down.

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