India to see 'k-shaped' recovery as inequalities grow: ex-RBI governor

Duvvuri Subbarao says policymakers have limited to help the economy as India battles a second wave of Covid-19 cases.

The Indian economy’s recovery is likely to be ‘K-shaped’ instead of a ‘V,’ as rising inequality is poised to hit consumption and growth prospects, according to the country’s former central bank Governor Duvvuri Subbarao.

“An important consequence of the pandemic has been the sharpening of inequalities,” he said in an interview Friday. “Growing inequalities are not just a moral issue. They can erode consumption and hurt our long-term growth prospects.”

India’s gross domestic product is forecast to grow by as much as 12.5% in the current fiscal year ending March, which will make the economy the world’s fastest growing major