K-shaped recovery narrative flawed and baseless: SBI Research
consumption will be done by 90% of the population at the lower end by the end of the next decade, State Bank of India researchers said in a new report released Friday, pointing to the country bridging the inequality gap in the coming years and dismissing K-shaped recovery as a flawed narrative.
The researchers stated that an “additional Rs 8.2 trillion of consumption had moved to the lower end of the pyramid post-pandemic following the saving of expenditure through free food, shelter and medical being provided by the government.”
The figure is expected to double to Rs 16 trillion by 2040. Using I-T returns data, SBI economists stated that income inequality has decreased over the last few years and that the K-shaped recovery narrative was false.
Inequality, as measured by Gini coefficient, has declined during FY14 and FY22, SBI pointed out, noting that 36.3% of people belonging to the lowest income group in FY14 have since moved up the income value chain.
“Our study shows that an individual’s weighted mean income has risen from Rs3.1 lakh to Rs11.6 lakh during FY14-21.
Further, based on the trends, we project the weighted mean income for FY22 to come in the range of Rs 12.5-13 lakh,” the report noted.
The number of taxpayers is set to increase to 85 million in the assessment year 2024 from 74 million in the previous assessment year. The research also noted a rise in female income tax filers, indicating a higher participation of women.
