India’s rural economy is witnessing a broad-based revival marked by rising incomes, stronger consumption and improved financial behaviour, according to the latest findings from NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS).
The eighth round of the bi-monthly survey, conducted since September 2024, presents the most comprehensive picture yet of rural households’ sentiment and economic well-being over the past year.
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The data reveals strengthening rural fundamentals, supported by welfare schemes, public investments, moderating inflation and robust demand.
The survey highlights a significant consumption boom driven by rising real purchasing power.
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“80% of rural households reported higher consumption compared with last year. Consumption now accounts for 67.3% of monthly income, the highest level since RECSS began, aided by GST rate rationalization,” the survey said.
This surge signals strong and widespread demand across the rural economy.
Rural incomes have improved markedly. As per the NABARD Survey, 42.2% of households experienced income growth, the strongest performance across all survey rounds.
Further, only 15.7% reported any decline in income, the lowest so far.
Looking ahead, 75.9% of respondents expect their incomes to rise next year, marking the highest level of optimism since 2024, it added.
It highlighted that the rural investment activity is accelerating, and the Credit access has also improved.
It said 29.3% of households increased capital investment this year, the highest recorded by the survey. Growth in investment is attributed to higher incomes and consumption rather than credit-related distress.
In terms of credit access, 58.3% of households now rely solely on formal credit—up sharply from 48.7% in September 2024. Informal borrowing persists at around 20%, indicating continued need for deeper financial inclusion.
Welfare transfers continue to play a stabilising role. On average, 10% of household monthly income is supplemented through government support, including subsidised essentials and social benefits.
For some families, these transfers exceed 20% of income, helping sustain consumption and economic resilience.
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