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76.6% of rural households report increase in consumption in last one year: NABARD Survey
Aug-01-2025

In a clear sign of rural economic momentum, the July 2025 round of the Rural Economic Conditions and Sentiments Survey (RECSS), released by National Bank for Agriculture and Rural Development (NABARD) has revealed that 76.6 per cent of rural households reported an increase in consumption in last one year, marking a sustained trajectory of consumption-led growth. It indicates that inflation concerns have eased, with over 78.4 per cent of households perceiving current inflation to be at or below 5 per cent, reflecting improved price stability.

According to the survey, the CPI-rural inflation fell from 3.25 per cent in March to 2.92 per cent in April and further to 2.59 per cent in May. Food inflation also dropped to 1.36 per cent in May. Financial health has shown improvement with 20.6 per cent of households reporting higher savings and 52.6 per cent sourcing loans solely from formal institutions. Among various informal sources of credit, the share of friends and relatives was more than the share of moneylenders. The average interest rate paid on informal credit declined about 30 basis points in the July 2025 round of the survey.

With regard to optimism, the survey said, it is strong, with 74.7 per cent expecting income growth over the next year and over 56.2 per cent anticipating better job prospects in the short-term. The findings paint an encouraging picture of rising incomes, expanding financial inclusion, and growing household optimism in rural India. Income and spending levels continue to be strongly supported by several fiscal transfer schemes, in both kind and cash -- both from the Centre and states. These include subsidies on food, electricity, cooking gas, fertilisers, and support for school needs, transport, meals, pensions, and interest subsidies. On average, these transfers made up about 10 per cent of a household's monthly income.  These interventions significantly enhance household resilience and reduce financial pressure, especially for vulnerable populations. The July survey also showed better perceptions of infrastructure, with only 2.6 per cent of households reporting any decline reflecting growing satisfaction with basic services like roads, electricity, water, education, and healthcare.
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