NEWS – Finance Minister recently rejected the theory that India’s ongoing recovery is ‘K-shaped’

K-SHAPED RECOVERY

• Economic term used to describe a scenario in which different segments of an economy recover from a downturn at different rates or in different directions, creating divergent paths of growth
• Indicates a more uneven and asymmetrical recovery.
• Different sectors, industries, or segments of the population experience contrasting trajectories during the recovery
• Result in an exacerbation of existing economic inequalities
• Specific industries or sectors may recover more quickly than others. For example, technology and certain online businesses may experience rapid growth, while industries like travel, hospitality, or traditional retail may face prolonged challenges.
• Some individuals or groups may see improvements in job opportunities and income levels, while others may face prolonged unemployment or stagnant wages
• Policymakers may need to consider targeted interventions to address disparities and ensure that the recovery benefits a broader spectrum of the population
• Factors such as global economic conditions, geopolitical events, and local policy decisions can contribute to the shape of the recovery. Different regions or countries may experience variations in their economic trajectories
• The term gained prominence, particularly during discussions about the economic impacts of events such as the COVID-19 pandemic, where certain sectors adapted well to the new normal (e.g., technology, e-commerce), while others faced significant challenges (e.g., travel, hospitality)