New Delhi, July 1 -- India has witnessed strong demand-led credit growth over the past few years. Retail lending continues to drive this growth story, while MSME credit is gaining momentum, and lenders across segments remain focused on growing their loan books.

According to the latest industry report by CRIF High Mark, the retail lending book has grown by over 14% year-on-year. While this seems like an encouraging trend, India's household debt ratio remains approximately 41-42% of GDP.

So India remains structurally under-leveraged relative to advanced and many emerging economies. Thus, the important question is whether we are seeing the full extent of credit demand in the economy, or only the portion that is easiest to measure and serve...