Dinesh Khara, Chairman, State Bank of India on Saturday said that the Indian economy is expected to be on normal course by early next fiscal even while the investment demand from corporate might take some time to pick up.

“In the month of October, all the high frequency indicators are showing very, very positive scenario. I think partly it is also attributed to the fact that there is a lot of Covid fatigue. Everybody would like to get into the mainstream economic activity as soon as possible. Earlier we had felt that it is a pent up demand coming from consumers. But I think now the way indicators are showing, there is a very clear trend pointing towards demand,” Khara said while addressing annual general meeting of The Bengal Chamber of Commerce and Industry (BCCI).

Some of the core sectors including cement and steel have been doing well and there have also been signs of revival in the construction sector. The FMCG and e-commerce segments have remained strong and performed fairly well, he said. However, sectors such as travel, tourism and hospitality have been impacted due to the pandemic.

Talking about credit offtake, while retail credit is back to pre-Covid level, however, corporate credit offtake, which is a function of capacity utilisation and demand, may take some time. However, demand is slowly improving and corporates have started utilising their working capital limits.

“When it comes to investment demand,| I think it is still sometime away and that is because as I look at it the capacity utilisation in the economy is somewhere around 69 per cent, and expecting any fresh investment demand coming from the private corporates looks quite unlikely for some more time to come,” he pointed out.

However, the cash rich public sector entities are expected to embark upon their capital expenditure plan and that could well serve as a lever to generate investment demands.

“Now, we have started seeing some kind of enquiries for brownfield capacity which is waiting resolutions in the NCLT. So, some kind of interest is seen from some of the corporates,” he added.

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