Car ownership reveals much about the shape and state of our economy
No consumer durable purchase is a more powerful marker of upward mobility than car ownership. Air conditioners, washing machines, etc, tend to be utility purchases. The car one owns, in contrast, is not just far more publicly visible, it is a status symbol in India.
Cars cost much more than other durables and they are seen as indicators of prosperity. In the absence of credible data on household income levels in India, especially among the well-off, patterns of car ownership (which also includes jeeps and vans) offer clues of relative earnings and wealth. It can also be used to understand differences in income levels among people working in different sectors of the economy, and across major Indian states.
In 2022-23, 6.7% of Indian households owned one or more cars, according to our estimates based on data from the Household Consumption Expenditure Survey; 3.7% of rural households owned a car, while urban car ownership was 13.2%. The survey does not ask the number of cars owned. Among agricultural households, whose earnings are mainly from farming and other primary-sector sources, only 3.3% had cars.
For those earning most of their livelihood from the industrial sector (including manufacturing and construction), the figure was 6.2%, and for households receiving most of their income from services, it was nearly 9%, the most among the three broad sectors. According to the same survey, 35.5% of Indian households were agricultural and around 11% industrial, while 53.5% were service households. Also, 72% of all car owners were service households, well above the sector’s share in total employment.
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