Asset scale: Caste divide greater in urban India

Recently there has been a lot of debate over the socio-economic status of different castes in India. If asset accumulation is anything to go by, then there are clear signs of a substantial difference between various castes and, in fact, these disparities have widened in urban India. However, in absolute terms, the overall asset accumulation is a lot higher in urban areas than rural ones for all castes.

The general category led the way in terms of overall asset accumulation in both rural and urban India, beating the other backward classes (OBC), the scheduled caste and the schedules tribe categories. In the general category the average value of assets per household is Rs 4.3 lakh in rural India, about 61% above the all-India average.

The value of assets is about Rs 5.6 lakh in urban India, about 34% higher than the all-India average, findings from a latest NSSO survey indicate. According to the statistics, most of the general category people have higher earnings, and hence a greater propensity to invest in assets.

Moreover, the accumulated assets of the general category is, on an average, 60-70% more than that of the OBC category, in both rural and urban India.

The OBC category has shown a greater incentive towards asset accumulation, compared with scheduled castes and schedule tribes. The average value of total assets per OBC household stands at Rs 2.6 lakh in rural India and at about Rs 3.3 lakh in urban India.

OBCs living in rural areas have matched the all-India rural asset accumulation average, while they have been way of the mark in urban India.

Asset accumulation was in both physical form and financial form. While land, building, livestock, agricultural implements, machinery, transport equipment, and household durable goods were considered as physical assets, shares and deposits, cash dues receivable, and cash in hand were regarded as financial assets.

Most of the respondents in the survey appeared to be more risk averse and preferred to accumulate assets in the less risky physical form, like land and buildings.

In fact close to 97% of all assets were accumulated in physical form in rural India, while about 90% of asset accumulation was in the form of physical assets in Urban India.

In rural India, the general category had the highest composition of asset accumulation in the form of land, while schedule castes had the highest accumulation in the form of buildings. In urban areas, the OBC category had the highest proportion of asset accumulation of 41.6% of total assets in the form of land.

The schedule castes had the highest proportion of assets in the form of buildings, and surprisingly the schedule caste and schedule tribe have shown a greater bend towards creating financial assets than the general category and the other category.