80 pc of rural households report higher consumption, 42.2 pc see income growth: NABARD

New Delhi, Dec 11 (IANS/WISHAVWARTA) 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.

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