Identity based voting is a second best solution adopted by households to minimize the negative effects of one’s own identity and (or) identity based coalitions. If a significant source of household welfare is one’s identity or, membership in ethnically defined groups, then politics that results will be parochial in nature. In parochial politics voting along ethnic lines becomes a significant tool for gaining welfare or to discipline the elected representatives. Using newly available data from rural India, we establish that identity based voting will lead to enhanced participation in welfare programs and increased consumption growth. The paper is able to able to show that identity based voting results from the externalities derived from membership in social and information networks, and  such voting by enhancing participation in welfare programs leads to significant increases in household consumption growth.