The Income Question

A household survey to gauge earnings is welcome but challenging

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The Ministry of Statistics and Programme Implementation has announced a comprehensive household income survey, tentatively scheduled to kick off next year.

The findings of an all-India income distribution survey could reveal critical structural shifts in the spending capacities of the economy's most vital actors, and help derive critical metrics like poverty incidence, the extent of income inequality, and urban/rural households' general well-being.

Debates about whether economic growth is lifting all boats, or whether the trickle-down effect is evident, tend to be sharp and contentious but seldom based on credible data. Instead, proxies such as Household Consumption Expenditure Survey (HCES) numbers, or the data on tax filings, are relied on.

The World Inequality Lab, which uses the latter along with national income and other surveys, has estimated inequality declined in India between 1947 and the early 1980s, before reversing course and widening dramatically over the last 25 years.