Bank loans to both large industries as well as small scale sector contracted in the Covid hit fiscal year, but the silver lining was the farm sector and the medium sized industries which were handheld by the government with special schemes with subsidies.Agri loans rose by 12.3 per cent in the year ended March. 31, 2021, compared to 4 per cent the year before, while loans to retail grew by 10 percent, it was lower than the 15 recorded a year earlier.The pandemic led contraction in economic activity led to a sharp slowdown in credit demand Non-food bank credit growth rose by 4.9 per cent in March 2021, lowest in more than five decades as compared to 6.7 per cent in March 2020. Loans to large industries contracted by 0.8 per cent, while loans to micro and small enterprises rose by a mere 0.5 per cent. But several initiatives and schemes by both the government as well as targeted liquidity schemes for medium sized firms helped push loans to medium sized firms by 28.8 per cent in FY’22 which were seen contracting in the previous year. Corporate credit or loans to large industries which accounts for 49% of overall bank credit growth was anyway expected to contract this fiscal due to lack of any capacity build-up. Besides, financially stronger firms have raised funds directly from the market, said an RBI study published in its March monthly bulletin. That should change next fiscal, when corporate credit is expected to grow 5-6% led by the government’s infrastructure push and a likely revival in demand, according to a recent report by ratings firm Crisil.One sector that was consistently on high growth path throughout the pandemic is agriculture. The pandemic had left the rural economy untouched most part of the year. Besides, better than expected monsoon during the year and higher farm activity resulted in agri loan demand going up by more than three times to 12. 3 per cent in FY’21 compared to 4.2 per cent in the previous year.