Household-Level Economic Transitions by Caste, 2005–2022

Since India’s independence, censuses have gathered caste-based data. However, policies rely on outdated OBC data from the 1931 Census. I’ve analyzed data from the India Human Development Survey, National Sample Survey and Periodic Labour Force Survey to determine what, if any, effect caste continues to have on household livelihoods.

Since India’s independence, the Census has enumerated Scheduled Castes (SCs) and Scheduled Tribes (STs) with their specific Jati (social group) details and their educational and economic profile. However, respondents were not asked if they belonged to Upper Castes or Otherwise Backward Classes (OBCs). The last comprehensive caste data comes from the 1931 Census, which estimated OBCs at 52% of the population. Current OBC reservation policies are still based on this outdated data.

Proponents of a national caste Census argue that updated information on all castes would improve affirmative action policies. Critics worry it could increase social tensions and expand quotas. Some even believe that caste has become irrelevant to understanding the inequalities in Indian society. Amid this ongoing debate, we argue that caste remains crucial in determining households’ livelihoods. Using data from the India Human Development Survey (IHDS) (I & II), National Sample Survey (NSS) (2011–2012) and Periodic Labour Force Survey (PLFS) (2022–2023), our analysis — focusing on broader caste categories, namely Others, OBC, SC, and ST — shows that caste continues to play a significant role in shaping economic transitions at the household level. 

The IHDS for 2005 and 2011–2012 is the only available pan-India level panel dataset. It interviewed 41,554 households in 2005 and reinterviewed 85% in 2011. We aim to understand household-level transitions in the principal sources of income for each social group during a period of rapid economic growth in India, which likely created favorable conditions for shifts in livelihoods.

We categorize principal income sources into five groups: Agriculture Self-Employment (ASE), lower-tier, business, upper-tier and others. ASE includes cultivation and allied agricultural activities, which, according to the National Commission for Enterprises in the Unorganised Sector (NCEUS) (2007), are mostly part of the unorganized sector. Lower-tier income sources encompass earnings from wage labor in both the agricultural and non-agricultural sectors, as well as income from self-employment in the non-agricultural sector, such as working as an artisan, independent worker or in a petty shop or trade. All these activities are considered part of the unorganized sector, with workers facing varying degrees of vulnerability. Business refers to income earned from organized business or trade activities. Upper-tier income sources consist of earnings from regular salaried employment. The “others” category includes income sources such as pensions, rent, dividends and similar forms of income. These sources do not directly form part of the workforce and are therefore not considered here.

To understand the hierarchy between the different income groups, we compare the annual consumption expenditure per capita across households with different income sources as their principal income sources.

Investigating consumption expenditure

We find that in both periods, households with lower-tier income sources as their principal income sources have the lowest consumption expenditure per capita, followed by those engaged in Agriculture Self-Employment (ASE). In 2005, households with upper-tier income sources as their principal income source had the highest consumption expenditure per capita. In 2011, families with business income as their principal income source had the highest consumption expenditure per capita.