India’s poverty count
India is set to launch its first National Household Income Sample Survey in February.
It will directly measure household income and assess poverty levels.
The initiative aims to provide a more accurate picture of poverty than traditional expenditure-based estimates.
Challenges remain as past attempts faced issues with income disclosure and accurate reporting.
Come February, India will roll out its first National Household Income Sample Survey. The Survey will measure household income, which will also estimate the level of poverty, or prosperity, in the country.
The Survey will, effectively, prepare a household’s balance sheet. It will seek extensive information on income and expenditure of a household — from input and output costs of a farmer to a taxpayer’s out pay to loan burdens to an informal worker’s days of work and income to a hotel employee’s earnings from tips.
Spanning across community groups, the survey will assess “profits” for each household based on income and expenditure, and will also make value assessment for assets like land and farms. Such income surveys, though first time being adopted in India, are in use in countries across the world, like the US, China and Bangladesh, to name a few. More to it, for each household, the survey will also assess the monetary value of welfare programmes to reach a final income assessment.
This is an important development as India suffers from a lack of data on its poverty. Usually, India uses the household expenditure survey done by the National Statistics Office (NSO) to measure poverty — the expenditure is used as a proxy to gauge income, an indirect method to measure income.
The last time India had a poverty estimate was in 2012 and a national poverty line was adopted in 2014. Though two household expenditure surveys were conducted in between, the government didn’t estimate poverty using the findings. So, India doesn’t have an official estimate of poverty, even though it implements vast targeted poverty eradication programmes.
The NSO had done a household consumption expenditure survey for 2022-2023. It was widely expected that it would be used to draw a new poverty line for the country and a fresh poverty estimate would be done.
But the government didn’t initiate this, and a few individual economists and researchers used the survey findings to draw their own conclusion on the level of poverty which has been widely contested. Government from its side started quoting multidimensional poverty figures to claim massive decline in “poverty” in India. Multidimensional poverty measure doesn’t capture income poverty. And it is not used in global poverty monitoring; it is a measure of deprivation. Amid this confusion, India decided to go for the direct household income survey in 2024.
Income surveys have been challenging, often not yielding the desired outcomes. Across countries having this direct mode of estimating household income, the sensitivity of people divulging income has been the most difficult challenge that fundamentally impacts the results. Besides, people tend to overestimate expenditure also. On the other hand, estimating one’s income from informal works has been found to be tough given multiple sources, and irregular work days.
India had a few experimental household income surveys in the past. During 1955-1970, NSO conducted four survey rounds seeking income data but all of them were found to be under-reporting. A pilot survey in 1983-84 was done but, again, it couldn’t be rolled out at national scale.
These surveys failed to capture the income levels due to multiple sources of income and the inability of household members to quantify, besides reluctance to disclose. Incomes from sources like rent and investments further made accounting daunting.
For rolling out the current national household income survey, NSO conducted pre-testing surveys in August 2025. And its findings re-confirmed the past fears. Around 95 per cent of respondents in this test survey didn’t wish to disclose income from various sources, and a similar proportion of tax-paying respondents refused to answer on tax being paid by them.
On the other hand, this testing survey also reported that both rural and urban households “overstated” expenditure while “understating” income. And the reasons for this are being unaware of income like from investments, interest from saving, among others.
As India experiments with a new method of poverty estimate, the drought of data cripples poverty eradication plans. Unlike in the past, one hopes, the re-testing of a method that failed many times will turn out to prove to be right this time.