The consumption gap between urban and rural areas in India continues to narrow, while the vehicle ownership rate has significantly increased.

According to a report published by the Prime Minister's Economic Advisory Council (PM-EAC) on November 24, the gap between urban and rural consumption in India is rapidly narrowing. In terms of vehicle ownership, the current vehicle ownership rate (two-wheelers or cars) for both urban and rural households exceeds half. Data shows that the vehicle ownership rate in rural areas has risen rapidly, from 19% in 2011-12 to 59% in 2023-24, while the vehicle ownership rate in urban households increased from 40.1% to 68.2% during the same period. Notably, the vehicle ownership rates in urban and rural areas are becoming similar in most Indian states, while in Haryana, Telangana, and Punjab, the vehicle ownership rate in rural households has already exceeded that in urban households. According to the analysis, improved market access, road infrastructure, and vehicle financing channels are the main driving forces behind the increase in vehicle ownership rates in urban and rural areas. In terms of television/mobile phone ownership, the television ownership rate in urban areas decreased from 80.4% in 2021-22 to 78.5% in 2023-24, while the mobile phone ownership rate increased from 92.2% to 97.7%. Meanwhile, the television ownership rate in rural areas increased from 49.6% to 61.1%, and the mobile phone ownership rate increased from 77.6% to 96.5%. In terms of consumption structure, there has been a significant shift in the spending patterns of urban and rural households. The proportion of food in the monthly per capita consumption expenditure of urban and rural households has fallen below 50% for the first time, while the share of expenditures on consumer goods and durable goods such as fuel, lighting, medical care, and education has increased. The report pointed out that the transformation of consumption patterns and the increasing diversification of consumption structures in urban and rural areas indicate that India is transitioning towards a middle-income country.

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