New Delhi: The latest installment of NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS), a high-frequency, bi-monthly assessment initiated in September 2024, offers the clearest evidence yet of a widespread revival in rural demand, rising incomes, and significantly improved household well-being over the past year. The year-long dataset now available allows for a realistic assessment of crucial rural economic shifts, covering both backward-looking conditions and forward-looking household sentiments.
The past year, spanning September 2024 to November 2025, has demonstrated a clear strengthening of rural economic fundamentals. With robust consumption, rising incomes, moderating inflation, and healthier financial behavior, rural India is seen to be on a positive trajectory, reinforced by sustained welfare support and strong public investment.
Consumption Boom Driven by Real Purchasing Power: Rising prosperity is evident as approximately 80% of rural households consistently reported higher consumption over the last year. The share of monthly income now spent on consumption stands at 67.3%, the highest since the survey began, a trend partially aided by GST rate rationalization. This signifies strong, broad-based demand, rather than being sporadic or concentrated in specific segments.
Income Growth Hits Highest Mark Since Survey Inception: Income growth has reached its best performance across all survey rounds, with 42.2% of rural households reporting an increase. Conversely, the percentage reporting any type of income decline fell to a record low of just 15.7%. The forward-looking sentiment is exceptionally strong, with 75.9% of households expecting their incomes to rise in the next year, marking the highest level of optimism recorded since September 2024.
Sharp Pick-up in Rural Investment Activity: Renewed asset creation in both farming and non-farm sectors is reflected by 29.3% of households increasing capital investment over the past year—the highest figure in any previous round. This surge in investment is attributed to strong consumption and income gains, rather than being a result of credit stress.
Formal Credit Access Reaches New Peak: Access to formal sources of credit has hit its highest mark, with 58.3% of rural households accessing only formal credit, up from 48.7% in September 2024. Despite this improvement, the share of informal credit remains about 20%, underscoring the ongoing need for deeper formal credit penetration.
Government Transfers Support Demand without Dependency: Welfare transfers, including subsidized food, electricity, cooking gas, and pensions, effectively supplement an average of 10% of monthly income. For some households, these transfers exceed 20% of total income, providing essential consumption support and helping to stabilize rural demand.
Inflation Perceptions Drop to One-Year Low: Inflation perceptions have moderated to 3.77% on average, falling below 4% for the first time since the survey’s initiation. A significant 84.2% of households perceive inflation at or below 5%, with nearly 90% expecting near-term inflation to remain below this level. This disinflationary trend has enhanced real income, boosted purchasing power, and improved overall welfare.
Improved Loan Repayment and Capital Investment Conditions: Lower inflation and interest rate moderation have resulted in a decline in the share of income allocated for loan repayment compared to earlier rounds. Furthermore, the 29.3% of rural households undertaking increased capital investment represents the highest level recorded in the survey.
Strong Endorsement for Rural Infrastructure and Basic Services: Rural households expressed high satisfaction with improvements in roads, education, and electricity, followed by drinking water and health services. These infrastructure and basic service enhancements are seen as complementing rising incomes and supporting long-term prosperity.