Large firms have become larger at the cost of smaller firms, while informal sector firms have been disrupted, stated HSBC in a report.
The report stated that those earning their livelihoods from small and informal firms have suffered, because 80 per cent of India's labour force is employed in the informal sector.
The rise in inequality holds significance for the investment cycle. In the period when India's investment rate was falling, a closer look reveals that it wasn't the public sector or the private corporations leading the fall, the report said.
This category includes a bulk of the small businesses in the economy. It was already a hurting and underperforming sector even before the pandemic.
The report added that there is hope that investment will revive, led by buoyant world growth and lower corporate debt.