File Photo: A Metro train passes through the city of Ahmedabad in Gujarat on February 19, 2025
| Photo Credit:
MOORTHY RV

The Gujarat government has signed an agreement with state-owned lender Housing and Urban Development Corporation Ltd (HUDCO) to secure long-term financing of up to ₹1 lakh crore for infrastructure projects, providing a major funding pipeline for metro rail expansion, expressways and urban development initiatives across the state.

The memorandum of understanding (MoU) was signed on Wednesday in Gandhinagar in the presence of Chief Minister Bhupendra Patel. The funding is expected to support a range of projects under the state’s long-term development roadmap, including Ahmedabad Metro Rail Phases 2 and 3, expressways, sports infrastructure and the development of Dholera as a greenfield smart city.

In a parallel development, the state government also signed an MoU with Indian Institute of Management Ahmedabad (IIM-A) to provide technical and strategic support for upcoming infrastructure projects. Under the agreement, IIM Ahmedabad will undertake pre-feasibility studies, feasibility assessments, preparation of detailed project reports (DPRs) and impact evaluations for projects planned under the Viksit Gujarat 2047 programme. The partnership is expected to help the government evaluate project viability, prioritise investments and improve execution outcomes for large infrastructure initiatives.

Published on June 17, 2026

While the microfinance sector witnessed a 17 per cent year-on-year (yoy) contraction in total portfolio outstanding between March 2025 and March 2026, the latest data indicates an inflection point, with visible greenshoots of recovery and microfinance borrowers graduating to retail, according to a report by SIDBI and Equifax.

The portfolio outstanding (POS) of the microfinance sector, comprising players such as non-banking finance companies – microfinance institutions (NBFC-MFIs), Banks, NBFCs and small finance banks – declined to ₹2,77,053 crore as at March-end 2026 from ₹3,35,060 crore as at March-end 2025 and ₹3,77,706 crore as at March-end 2024.

“While the microfinance sector witnessed stress and a portfolio consolidation over the period FY 2024-26 following a post Covid expansion phase (FY 2021-24), green shoots of a growth recovery are visible,” per the “Micropulse” report.

As at March-end 2026, the number of accounts in the sector declined 21 per cent yoy to 4.20 crore from 5.31 crore. Simultaneously, disbursements declined about 7 per cent yoy to ₹2.50 lakh crore in FY26 from ₹2.70 lakh crore in FY25.

Average ticket size (ATS) rose 17 per cent to ₹59,512 as at March-end 2026 against ₹50,893 as at March-end 2025.

Disbursement in the June-February-March (JFM) 2026 quarter stood at ₹78,938 crore, marking the highest level observed in the past JFM 2023, marking a milestone in the industry’s recovery, signalling a sustained return to growth mode.

“The microfinance industry has shown encouraging signs of recovery. While the portfolio outstanding declined by 17 per cent on a yoy basis, March 2026 marked a turnaround with a 3 per cent sequential growth over the previous quarter, the first time since June 2024 quarter. This reversal signals that lenders are gradually returning to a growth trajectory following a period of consolidation,” the report said.

Rising ETC shares

Analysis of the ETC–NTC mix highlights a structural shift in India’s credit landscape, with a steady move from new-to-credit (NTC) to existing-to-credit (ETC) borrowers over 2023–2026, reflecting tightening lender risk preferences with a focus on existing borrowers.

Over the 4 year period, NTC share has declined from 33 per cent in 2023 to 20 per cent in 2026 as lenders are focusing on existing borrowers with established credit history who can absorb larger amount loans.

The declining NTC share (20 per cent) and rising ETC (80 per cent) mix indicates a transition from credit expansion to credit deepening story of India, the report said.

Industry 30 + (days past due/ DPD) delinquency has declined from 6.64 per cent in March 2025 to 2.35 per cent in March 2026 but long-term stress remains the challenge. Over the same period 180+ DPD has increased from 10.68 per cent to 17.11 per cent.

“While the microfinance industry continues to manage the fallout from riskier loans disbursed in 2024, more recent disbursements are exhibiting significantly lower delinquency levels, indicating improving underwriting standards and stronger borrower selection,” the report said.

Among the top 10 states, the states that saw a de-growth of 10 per cent or more in POS include Karnataka (-28 per cent), West Bengal (-25 per cent), Odisha (-22 per cent), Tamil Nadu and Maharashtra (=20 per cent each), Rajasthan (-16 per cent), Bihar (-14 per cent), Madhya Pradesh (-13 per cent) and Uttar Pradesh (-10 per cent).

Crossovers

Referring to the analysis of the crossover of customers between microfinance and retail banking, the report said a significant 48 per cent of the sampled microfinance borrowers have successfully transitioned into the retail banking sector.

Out of an industry sample of 20 lakh customers 9.6 lakh are now using the retail banking products. These graduated customers hold 12.22 lakh active retail loans. The total retail portfolio outstanding for these customers is ₹14,639 crore.

The report said the borrowing pattern shows a healthy mix of both secured and unsecure credit, with the top 5 retail products availed by these customers being Gold Loan, Property Loan, Housing Loan, Business Loan Unsecured and Personal Loans.

Published on June 17, 2026

Virudhunagar , Tamil Nadu, 19/04,/2026. Thangam Thennarasu DMK candidate for DMK candidate for Tiruchuli Assembly constituency .Photo . Moorthy. G/ The Hindu.
| Photo Credit:
MOORTHY G

The new Tamilaga Vettri Kazhagam (TVK) government intends to use the White Paper on Finances as a tool to avoid fulfilling its pre-poll promises, former finance minister Thangam Thennarasu said here on Wednesday. “It is a form of escapism and indicates their inability to satisfy the welfare promises,” he said.

He was reacting to the White Paper on the Fiscal Management of Tamil Nadu released by the government on Tuesday.

Speaking about the white paper’s comments on debt levels, Thennarasu challenged the current TVK government to borrow less than the average annual borrowing of the last five years. He said he would give up all his positions if the TVK government implements the “good schemes of the DMK government” as highlighted by the white paper and fulfils its election promises through lower annual borrowing.

The White Papers of the past (in 2001 and 2021) focused on 10 and 15 prior years of finances. However, this time, the TVK government has chosen to focus only on the finances of the state during DMK rule in the last five years, he pointed out.

“Our government satisfied people’s promises despite the fiscal strain we had post Covid, but this government is trying to wriggle out of its promises using fiscal space as a reason,” he said.

As for comparison with peer states, he said that welfare schemes in peer states like Gujarat are much lesser compared to those of Tamil Nadu.

He also pointed out that the TVK government, which criticised slow capex in the last five years, has been seeking to discontinue projects such as the ECR elevated highway and the Parandur airport project, both of which are capital expenditure.

Reacting to the white paper’s comments on revenue deficit, he said that the report has not spoken about the external causes such as the GST rate rationalisation and funds that remain stuck from the Union government under Samagra Shiksha, Jal Jeevan Mission and other schemes. “The TVK government is somehow not ready to blame the Union government for all the challenges they have imposed on us,” he said.

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Published on June 17, 2026