India's K-shaped revival is a rather resilient story

A report by SBI Research aims to debunk the notion of a rich-versus-poor divergence in how we have fared but the overall weight of evidence doesn't justify rejecting the K hypothesis

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The letter 'K', whose shape is often used to denote a divergence in how the rich and poor are faring, has animated India's economic discourse of late. Now, SBI Research, a department of the government-run State Bank of India, has weighed in with a report that attempts to debunk the notion of a 'K-shaped recovery,' calling this label "ill-concocted" and flawed for overlooking data that points to reduced inequality in what Indians earn, as recorded by the Central Board of Direct Taxes (CBDT). As its chief exhibit, the report spotlights an income escalation over seven years since 2013-14 among lower-bracket taxpayers, with top earners having seen their share of the total reduce. "Income inequality captured through the Gini coefficient... of taxable income has declined from 0.472 to 0.40% during FY14-FY22," it says, referring to a statistical formula that would yield 0 under perfect equality and 1 if a single person earned it all. The SBI report speaks of a "great migration at the bottom of the pyramid." Its observations, however, do not dispel suspicion