Over 76% Rural Households Report Higher Spending: NABARD Survey

In a strong indicator of rural economic growth, 76.6% of rural households reported higher consumption, reflecting a continued trend of consumption-driven expansion, according to a NABARD survey.

The July 2025 round of the Rural Economic Conditions and Sentiments Survey (RECSS) shows easing inflation concerns, with 78.4% of households perceiving inflation to be at or below 5%, indicating improved price stability.

CPI-rural inflation declined from 3.25% in March to 2.92% in April, and further to 2.59% in May, while food inflation eased to 1.36% in May.

Financial health has improved, with 20.6% of households reporting increased savings and 52.6% relying exclusively on formal institutions for loans, the survey noted. Among informal credit sources, borrowing from friends and relatives surpassed that from moneylenders.

The July 2025 round of the Rural Economic Conditions and Sentiments Survey (RECSS) revealed a decline of about 30 basis points in the average interest rate paid on informal credit. The survey clarified that, since formal credit interest rates are available through official sources, its focus is solely on capturing data related to informal borrowing costs.

On the sentiment front, optimism remains high in rural India. Nearly 74.7% of households expect income growth over the next year, while 56.2% anticipate better job opportunities in the near term. The findings indicate a positive outlook, with rising incomes, deepening financial inclusion, and growing household confidence.

Income and consumption levels continue to be buoyed by a range of fiscal transfer schemes—both cash and in-kind—from central and state governments. These include subsidies for food, electricity, LPG, fertilisers, and assistance for school supplies, transportation, meals, pensions, and interest payments. On average, such transfers account for about 10% of a household’s monthly income, significantly boosting financial resilience, especially among vulnerable groups.

The survey also reported improved public perception of infrastructure. Just 2.6% of households noted any decline in basic services, indicating rising satisfaction with facilities such as roads, electricity, water supply, education, and healthcare.

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