Rural demand sees revival as incomes rise: Nabard survey

NEW DELHI: About 80% of rural households have reported higher consumption over the last year and 67.3% of monthly income is now spent on consumption, a survey by Nabard showed. The 8th round of Nabard’s rural economic conditions and sentiments survey (RECSS) also showed that 42.2% of rural households experienced income growth. About 15.7% reported an income decline of any type, the lowest recorded so far, while 75.9% expect incomes to rise next year, showing the highest level of optimism since Sept last year.“The past one year has seen a clear strengthening of rural economic fundamentals. With robust consumption, rising incomes, moderating inflation and healthier financial behaviour, rural India is on a positive trajectory. Sustained welfare support and strong public investment are reinforcing this momentum,” according to the survey.The survey also showed that rural economic activity had picked up sharply. About 29.3% 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,” according to the survey.The survey showed 58.3 % of rural households have accessed only formal sources of credit, highest so far among all rounds of the survey, up from 48.7% in Sept 2024. “However, share of informal credit is about 20%, underscoring the need for continued push for deeper formal credit penetration,” said the survey.