RBI: Post Covid economic growth is not unequal

RBI Governor Shaktikanth Das

Rama Krishna Sangem

Reserve Bank of India (RBI) dismissed the argument that after Covid pandemic economic inequalities have grown in the country. 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 thrives while other sectors continue to decline or struggle to recover.


Physical assets to financial assets

It further said post-pandemic, there has been 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. However, it said, recent data shows that there is a shift towards financial assets since 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 income pattern of MSMEs, too, reflecting the changing contours of industry/services as formalisation drive brings more entities into the net.

Around 19.5 per cent of majorly 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 per cent firms have transitioned themselves into small firms, around 6.1 per cent firms transitioned into medium-sized firms, and around 9.3 per cent firms are transitioned into large-sized firms.

This clearly indicates MSME units are getting bigger and getting integrated into larger value chains with initiatives like Production Linked Incentive (PLI), it added.

Rama Krishna Sangem

Ramakrishna chief editor of excel India online magazine and website

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Chief Editor

Rama Krishna Sangem

Excel India national news magazine is a media startup founded and piloted by Rama Krishna Sangem, a Hyderabad based senior journalist with over three decade experience in the field of media, mostly in print journalism. His rich experience in reporting for both Telugu and English newspapers and heading a TV news channel and some online outfits will be of immense use to this venture. Excel India English news magazine seeks to fill the gap of analytical understanding to our readers who today are confronted with myriad media platforms. Our online version not only offers regular updates and commentary on happenings around us, but also gives larger stories not limited by space constraints of a print magazine. Excel India is ably run by a team of senior journalists committed to values and quality standards in the profession. We urge you all to support and guide us in this endeavour. Reach us at excelindiaweb123@gmail.com