Bank Credit Growth Outlook

The expected scenario for bank credit growth this financial year indicates a moderation from the previous year's robust growth rate of 16%. This moderation is attributed to several key factors:

Key Factors for Moderation

• Statistical High-Base Effect:
  The strong growth rate observed in the last financial year sets a high benchmark, making it challenging to achieve similar growth percentages this year.
• RBI's Revision in Risk Weights:
  The Reserve Bank of India's decision to increase risk weights on bank lending, particularly to non-banking financial companies (NBFCs) and for unsecured loans, has resulted in reduced credit growth in these segments.
• Relatively Slower Economic Activity:
  There is an anticipation of slower economic activity, which is expected to contribute to the moderation in credit growth. Additionally, the country's gross domestic product (GDP) growth is expected to moderate, further impacting credit demand.

Conclusion

In summary, while last financial year witnessed significant credit growth driven by strong economic activity and retail credit demand, this year is expected to see a slower growth rate due to high base effects, regulatory changes by the RBI, and a general slowdown in economic activity.

CBDT's PRUDENT Approach for 2025

The Central Board of Direct Taxes (CBDT) aims to enhance its operations in 2025 by adopting the 'PRUDENT' approach, as detailed by Chairman  in his address to the Income Tax Department.

Key Elements of PRUDENT

• P - Professionalism
• R - Responsible and Responsive
• U - Understanding transactions and businesses
• D - Dedication and Due Diligence
• E - Effective Enforcement
• N - Non-intrusive Administration
• T - Technology-based Tax Administration

Achievements and Future Commitment

• In the past year, over 2.4 lakh grievances were resolved, with 1.75 lakh through the E-nirvan platform.
• The department plans to enhance taxpayer services and strengthen trust in the tax system through technology.
• Chairman emphasized continuous improvement and maintaining excellence through collaborative efforts and timely grievance resolution.

Improvement and Training Initiatives

• Leveraging technology to encourage voluntary compliance and improve taxpayer services.
• Enhanced training programs and refined approaches to investigations and disputes.
• Undertaking a comprehensive review of the Income Tax Act with contributions from officers and stakeholders nationwide.

The focus for 2025 will be on building a productive and fulfilling workplace, enhancing taxpayer services, and addressing concerns effectively to build trust in the system.