While credit to medium and large industries increased by Rs 14,926 crore during 1997-98 compared with Rs 9,551 crore during 1996-97, that to small-scale industries increased by Rs 7,564 crore in 1997-98 against the Rs 4,060 crore during the previous year, says the Reserve Bank in its Currency and Finance Report for 1997-98.

Credit expansion during 1997-98 was widespread in the iron and steel, petroleum, electricity, cotton textiles and chemicals industries, while a marginal deceleration was witnessed by a few industries like other textiles, food-processing, vegetable oils and paper and paper products.

Credit deceleration was most pronounced in the metal and metal products group. The share of medium and large industries in non-food gross bank creditincreased to 39.6 per cent in 1997-98 from 32.6 per cent in 1996-97.

Advances extended by public sector banks to the priority sector increased to Rs 91,319 crore in 1997-98 against Rs 79,131 crore in 1996-97, registering a growth of 15.4 per cent over the year. However, advances to the agricultural sector decreased from 16.3 per cent (Rs 31,012 crore) in 1996-97 to 15.7 per cent (Rs 34,304 crore) in 1997-98. This fell short of the stipulated priority sector lending target of 18 per cent.

Private sector banks' advances to the priority sector increased to Rs 11,614 crore in 1997-98 from Rs 8,831 crore in 1996-97 while those by foreign banks stood higher at Rs 6,940 crore in 1997-98 compared with Rs 6,170 crore in 1996-97.

On the export credit front, credit extended by scheduled commercial banks increased to Rs 34,430 crore (10.7 per cent) in 1997-98 from Rs 30,112 crore (10.9 per cent) in 1996-97, but lower than the target of 12 per cent set for 1997-98. This target for 1997-98 could not be realised owingto the sluggish export growth during the year. Export credit as on the last reporting Friday of June 1998 stood at Rs 34,956 crore (11 per cent).

Bank credit during 1997-98 increased by Rs 45,678 crore (16.4 per cent) compared with Rs 24,386 crore (9.6 per cent) in 1996-97. While non-food credit increased by Rs 40,789 crore (15.1 per cent) during 1997-98, compared with Rs 26,581 crore (10.9 per cent) in 1996-97, food credit increased sharply by Rs 4,889 crore (64.4 per cent) in 1997-98 compared with a decline of Rs 2,195 crore (22.4 per cent) during 1996-97. This was mainly on account of larger procurement of wheat and rice.