Indian companies appear to be turning inward to fund their growth, reporting a slowdown in debt accumulation over the past five years, a new report by the Bank of Baroda said.The research, which analysed the debt levels of non-financial corporates, found that total borrowings rose from Rs 20.7 lakh crore in FY21 to Rs 22.6 lakh crore in FY25, reflecting a modest compound annual growth rate (CAGR) of 2.9 per cent. This is a sharp decline compared to the 8.7 per cent CAGR recorded between FY15 and FY20, ANI cited the BoB report.“Growth in debt in the five years ending FY25 was slower than that in the preceding five-year period,” the report noted.Debt growth has not been uniform across the years. There was a 5.9 per cent rise in FY21 but the pace dropped significantly to 1.4 per cent in FY22. However, FY23 saw an uptick of 5.7 per cent, followed by a decline of 0.7 per cent in FY24, which the report said was largely due to deleveraging, where companies actively paid off loans to reduce their debt burden.Despite this subdued borrowing, corporate investment in fixed assets remained healthy. This suggested that firms have increasingly turned to internal accruals, profits retained within the company, for funding their expansion plans, rather than relying on external debt.The report also offered a sector-wise analysis, revealing that power, crude oil, telecom, and infrastructure continue to dominate the corporate debt landscape. Out of the 25 sectors studied, 13 recorded a debt growth rate higher than the overall average of 2.9 per cent. Notably, telecom, power, and infrastructure-related industries saw strong growth in debt levels, supported by increased government capital expenditure and a steady flow of new orders.The report also examined how responsive corporate debt levels have been to changes in Gross Value Added (GVA), excluding sectors such as agriculture, financial services, real estate, professional services, and public administration. It found that this correlation has weakened in the period following FY20, further indicating that companies are increasingly funding their growth through internal accruals rather than borrowing. The findings show that companies are becoming more careful with their finances, taking on less debt and paying off the old ones.