CNBC reports that according to JPMorgan’s chief emerging markets economist, a major risk to India’s economic recovery is that millions of households and small businesses may potentially be cut off from the credit they need.

The government, the central bank, and analysts are underestimating the level of permanent scarring that can take place in South Asia’s largest economy as a result of last year’s pandemic-led contraction, Jahangir Aziz said CNBC.

The loss of income related to the coronavirus pandemic has run into billions of dollars on an annual basis, according to Aziz. “We know that the listed companies did not suffer that much, so, it has to be that the SMEs (small and medium enterprises) and the households took a much larger hit,” he said.

“I just can’t imagine that with that kind of income loss, you won’t have serious impairment of balance sheets of households and SMEs,” Aziz added.