The repeated argument that India witnessed a K-shaped recovery post-pandemic is "flawed, prejudiced, and ill-concocted", said a research report by SBI on Monday. According to the report, post-pandemic, households are reconfiguring their savings towards physical assets, including real estate, it said.
"The oft-repeated conundrum debating a K-shaped recovery post-pandemic seems at best flawed, prejudiced, ill-concocted and fanning interests of select quarters to whom India's remarkable ascendance, signalling more the renaissance of the new global south, is quite unpalatable," the report said.
K-shaped recovery reflects uneven recovery where certain sectors of the economy thrive while other sectors continue to decline or struggle to recover. It further said that post-pandemic, there has been a two-way shift between savings channelised into physical assets from financial assets in consonance with the global trend to take advantage of lower interest rates.
Also Read: SBI Chairman: No concern on asset quality so far, expect industry credit growth at 14-16%
However, it said, recent data shows that there is a shift towards financial assets from 2023 onwards. "Gini coefficient estimated using ITR data of taxable income of individuals shows that individual income inequality has significantly declined from 0.472 to 0.402 during FY14-FY22," it said.
There is a change in the income pattern of MSMEs, too, reflecting the changing contours of industry/services as formalisation drive brings more entities into the net. Around 19.5% of major micro-sized firms have been able to shift their income upwards, to classify them into small, medium, and large-sized firms, it said.
Of these, it said, 4.8% of firms have transitioned themselves into small firms, around 6.1% of firms transitioned into medium-sized firms, and around 9.3% of firms have transitioned into large-sized firms. This indicates MSME units are getting bigger and getting integrated into larger value chains with initiatives like the Production Linked Incentive (PLI), it added.
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