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Saturday, October 23, 2021

Household-level asset ownership: just 3% in India, Delhi on top

An analysis of asset ownership data at the household level collected by Lokniti-CSDS indicates that no more than 3% of Indian households — that is, 1 in every 33 — own these five assets at the same time.

Written by Manjesh Rana | New Delhi |
Updated: October 14, 2021 7:16:15 am
It is likely that the growth in the ownership of these assets over the last two years has slowed down compared to the pre-pandemic period. (File)

Defining Indian households in terms of prosperity has always been a tricky exercise for economists.

Gauging who can afford the five assets of a car, an air-conditioner at home, a desktop or laptop computer, a refrigerator, and a television set, has been seen as an important indicator of economic well-being in a fast-growing, aspirational economy.

Apart from bigger assets such as a home or a piece of land, these five assets may be understood as ones that middle-class Indian households typically yearn to possess.

Ownership of assets

What proportion of Indian households own these five assets?

An analysis of asset ownership data at the household level collected by Lokniti-CSDS during its National Election Study in 2019 indicates that no more than 3% of Indian households — that is, 1 in every 33 — own all of these five assets at the same time.

The pace of growth of ownership of these assets has been unexceptional in recent years — five years previously, in 2014, the percentage of households that owned these assets was 2%, or 1 in every 50 households. (Table 1)

Source: NES 2019; Lokniti-CSDS

At a time when Covid-19 has caused an unprecedented dent in the economy and household incomes have shrunk across large sections of the population, it is likely that the growth in the ownership of these assets over the last two years has slowed down compared to the pre-pandemic period.

Asset-ownership data collected during our studies in the five states that have gone to polls after the onset of the pandemic (Bihar, West Bengal, Tamil Nadu, Assam, Kerala), show the numbers have remained constant.

It is important to add here that while the proportion of households with the purchasing power to own all of these five assets together might be very small, if one looks at each of these assets individually, the growth in ownership appears to have been quite robust for at least some of these items.

For instance, ownership of a refrigerator went up from 29% to 42% between 2014 and 2019; that of computers/laptops rose from 10% to 16% during this same period. (Table 1)

The growth of car-ownership, however, has been painfully slow.

If your family owned a car in 2019, you were among just 11% of the total households in the country. Those who live in congested cities, and are familiar with arguments over parking space, would perhaps find it surprising that only about a quarter of households in Indian cities own a car of their own.

Even so, people who live in cities are much better off than their rural counterparts in this respect, the data show.

A temporal comparison of the last two decades shows that while the proportion of households with a car more than doubled in the first five years of this period — from 2% in 1999 to 5% in 2004 — the growth slowed thereafter; it took the next 15 years to reach the 10% mark. (The figures for 2009 and 2014 were 6% and 8% respectively.)

It’s worth mentioning here that over half of Indian households own a two-wheeler (56%) — and that for the vast majority, a two-wheeler is more affordable than a car.

Also noteworthy is the fact that over two-fifths of families (42%) do not have either a car or a two-wheeler.

Finally, despite air-conditioners being extremely common in the metros, in the country as a whole, ACs remain outside the budget priority of 9 out of every 10 households.

Unequal distribution

The data show major differences in asset ownership among the various social groups. Thus, upper-caste Hindu households are seven times more likely to own all the five assets, compared to Dalit (SC) and Muslim households. (Table 2)

Also, every fifth upper-caste Hindu family travels in a car, as against every twentieth Dalit family.

Among religious groups, Sikh households were found to be the most prosperous. (Table 2)

Rural vs urban; among states

Indian households continue to witness persistent inequality in asset distribution. The pattern of asset-ownership varies significantly with how urban the area is.

As against about 13% of households in cities, only 5% of households in towns, and merely 1% in villages, could boast of having all of the five assets in 2019. (Table 2)

A comparison among states is more revealing. The highly urbanised or high per-capita-income states of Delhi, Punjab, Goa, and Kerala, in that order, emerged at the top of the table in this regard. All of these states had a double-digit proportion of households owning all the five assets together in 2019.

At the other end of the spectrum, there were eight states in which merely 1% of households had these assets, with Jharkhand and Assam being the worst off. (Table 3)

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