We examine the ability of Indian households to absorb income shocks using household level consumption expenditure data between January 2016 and April 2022. We measure income volatility and evaluate the impact of income volatility on household welfare by estimating intertemporal consumption equation. We find that consumption volatility has increased significantly for lower income quantile, lower caste and Muslim households, the traditionally vulnerable population of India relative to others, indicating their inability to absorb income shocks. Their low levels of assets holdings and lack of access to credit could explain the substantially higher welfare loss they faced compared to others