India’s economic discourse is shaped by numbers. GDP growth, inflation, household consumption expenditure, inequality ratios and employment data drive headlines and policy debates. Institutions such as the National Sample Survey Office — now part of the National Statistical Office — have built one of the developing world’s most respected statistical traditions. But there’s still a case for reform.
For decades, the National Sample Survey (NSS) has enabled rigorous tracking of poverty, rural–urban gaps, and regional inequality. And we must build on the strengths of such surveys. They become even more analytically valuable when they also capture the social norms and intra-household dynamics that shape economic decisions. Culture does not dilute economics; it sharpens interpretation.
While the NSS tradition already recognises that economic life is socially differentiated, it misses a crucial layer: who holds power within households. Who controls income? What norms dictate spending or saving? Which expenses are socially obligatory? And how do aspirations shape investments in education, housing or rituals?
Economics needs cultural context
Economic behaviour in India has never been culturally neutral. As I argue in my book Dharmanomics, historical Indian economic systems embedded wealth creation within ethical frameworks such as dharma, linking prosperity with duty and intergenerational balance. Whether interpreted philosophically or institutionally, the empirical insight holds: markets function within social rules. Choices are shaped not only by income and prices, but by norms about honour, kinship, hierarchy and mobility.
These influences are visible in everyday behaviour. Families prioritise children’s education even under financial strain. Significant resources are devoted to weddings and life-cycle rituals because kinship obligations demand it. Elder care and remittances to extended relatives are treated as moral responsibilities rather than discretionary transfers. In many contexts, women’s access to household income is mediated by authority structures, influencing allocations to health, nutrition and savings. These are not anecdotal curiosities; they are systematic behavioural patterns. But they are not systematically measured.
The work with successive ‘ICE 360° surveys’ at People Research on India’s Consumer Economy (PRICE) underscores this gap. Households at comparable income levels often display sharply different savings rates, asset portfolios and spending priorities depending on region, social background and decision-making structures. Where women participate meaningfully in financial decisions, formal savings and long-term investments tend to be stronger. Where aspirations for upward mobility are pronounced, expenditure on education and digital access rises even if present consumption is compressed.
A regional comparison makes the point clear. Consider households with similar incomes in parts of North and South India. In several northern states, families often prioritise visible assets — land, gold, or housing improvements — as stores of value that signal stability within societal networks and serve as informal insurance where public service delivery and social protection have historically been uneven. Important life events, such as marriages, may anchor long-term savings behaviour.
In contrast, in many southern states, deeper welfare penetration, stronger public health and education systems, and more extensive self-help group networks play prominent roles. These factors are associated with greater use of formal savings instruments, insurance products and sustained investment in human capital. Analogous patterns have been observed in East Asia, where Confucian norms around filial piety and collective obligation shaped household saving behaviour across generations — long before modern financial infrastructure made such decisions purely economic.
These are broad tendencies, not stereotypes, and variation within regions is substantial. Yet the heterogeneity in how cultural norms impact consumer choices is visible. Two households earning the same income may differ significantly in liquidity buffers, financial resilience and long-term investment strategies — not only because of market access, but because social norms interact with state capacity to shape perceptions of risk, security and intergenerational mobility. Without measuring these underlying drivers, survey data capture the outcome but miss the logic behind it.
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Policy blind spots
The policy implications are considerable. A measured decline in consumption could be interpreted purely as distress, when some component reflects precautionary savings linked to educational aspirations or social obligations. A direct benefit transfer may not generate expected welfare gains if one doesn’t understand how women allocate resources within the family based on their cultural norms. Income-based inequality metrics may be viewed differently if the familial structures and norms are considered social safety nets. When social variables remain invisible, policy inference becomes less precise.
Incorporating such dimensions need not compromise statistical rigour. The NSS legacy demonstrates that nationally representative surveys can integrate complex modules on employment, health and migration. Adding structured questions on intra-household decision-making, control over income, ceremonial obligations, informal risk-sharing networks and aspirational goals would extend this tradition, not disrupt it. These variables are measurable and amenable to quantitative analysis.
India stands at a pivotal statistical moment as it refines household income and consumption surveys. The next step is evolutionary: to complement monetary metrics with systematic evidence on the cultural norms that shape them. By counting not only what households earn and spend, but also how and why decisions are made, India can deepen its understanding of diversity and improve policy interpretation. Cultural context does not weaken economic analysis. It makes numbers speak more truthfully about the society they are meant to represent.
Sriram Balasubramanian is a former IMF Economist and best selling author of Dharmanomics. Dr Rajesh Shukla is Managing Director and CEO of People Research on India’s Consumer Economy (PRICE). Views are personal.
(Edited by Ratan Priya)