80 pc of rural households report higher consumption, 42.2 pc see income growth: NABARD
New Delhi, Dec 11
About 80 per cent of rural households have consistently reported higher consumption over the last year -- a hallmark of rising prosperity, a NABARD survey showed on Thursday.
About 67.3 per cent of monthly income is now spent on consumption, the highest share since the survey began, aided by GST rate rationalisation. This demonstrates strong, broad-based demand - not sporadic or concentrated in specific segments, according to a statement from Finance Ministry.
The eighth round of NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS), presents the clearest evidence of a broad-based revival in rural demand, rising incomes and improved household well-being over the past year.
According to the findings, about 42.2 per cent of rural households experienced income growth -- the best performance across all survey rounds.
“Just 15.7 per cent reported an income decline of any type - the lowest recorded so far. Future outlook is exceptionally strong as 75.9 per cent expect incomes to rise next year - the highest level of optimism since September 2024,†the findings showed.
About 29.3 per cent of households increased capital investment over the past year - more than any previous round, showing renewed asset creation in farming and non-farm sectors. The pick-up in investment is driven by strong consumption and income gains, not credit stress.
About 58.3 per cent of rural households have accessed only formal sources of credit - the highest so far among all rounds of this survey, up from 48.7 per cent in September 2024, said the survey.
However, the share of informal credit is about 20 per cent, underscoring the need for continued push for deeper formal credit penetration, it added.
Nearly 10 per cent of average monthly income is effectively supplemented through welfare transfers such as subsidised food, electricity, water, cooking gas, fertilisers, school support, pensions, transport benefits and more.
For some households, transfers exceed 20 per cent of total income, providing essential consumption support and helping stabilise rural demand.
With lower inflation and interest rate moderation, the share of income allocated for loan repayment has declined compared to earlier rounds.
About 29.3 per cent of rural households have undertaken increased capital investment during the last year, which is the highest level among all rounds of the survey.
NABARD’s Rural Economic Conditions and Sentiments Survey is conducted every two months across India.
— IANS
Reader Comments
While the numbers look positive, I hope this prosperity is reaching all sections equally. The 20% still on informal credit is a concern. We need more banking correspondents in remote areas. The welfare transfers are a lifeline for many families, glad to see that acknowledged.
As someone who moved from a tier-2 city to Delhi for work, this gives me hope that maybe I can return and start something in my hometown. Increased capital investment means people are thinking long-term, not just daily wages. Future looks bright for Bharat! 💪
Consumption is up, but so is spending - 67.3% of income on consumption is quite high. Hope savings and investments are also increasing alongside. The optimism for next year is infectious though! My didi in the village says she's finally able to save for her children's education.
Interesting data point for investors. Strong, broad-based rural demand is crucial for the overall Indian economy. The shift from informal to formal credit is a structural positive that reduces systemic risk. The survey methodology seems robust.
The part about welfare transfers supplementing income is so true. For my grandparents' household, the pension, subsidised LPG and rations make a real difference. It's not just about survival anymore, it allows for a little extra spending. Good to see data backing up what we see on ground.
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