New Delhi, Dec 11: NABARD’s eighth round of the Rural Economic Conditions and Sentiments Survey (RECSS) has reported the strongest signs yet of a broad-based revival in rural demand, with households recording higher consumption, rising incomes and improved financial well-being over the past year.
The high-frequency, bi-monthly survey, conducted since September 2024, now provides a full year of data that captures both shifts in rural economic conditions and changes in household sentiment.
According to the latest findings, rural economic fundamentals strengthened markedly between September 2024 and November 2025, supported by robust consumption, moderating inflation, healthier financial behaviour and continued welfare support. Public investment has further reinforced this momentum, placing rural India on a firm recovery path.
A sustained rise in consumption has become one of the clearest indicators of this revival. Nearly 80 per cent of rural households reported higher consumption throughout the past year, reflecting stronger purchasing power. Consumption now accounts for 67.3 per cent of monthly household income — the highest level recorded since the survey began — aided by GST rate rationalisation. Surveyors noted that this trend reflects broad-based demand rather than isolated spending spikes.
Income growth has also reached its highest level since the inception of RECSS. Around 42.2 per cent of households reported an increase in income, while only 15.7 per cent saw any decline, the lowest so far. Optimism remains high, with 75.9 per cent of households expecting their incomes to increase over the next year.
Investment activity, both in agriculture and non-farm sectors, has picked up significantly. The survey found that 29.3 per cent of households increased their capital investment in the past year, marking the highest rate across all survey rounds. Analysts say this improvement appears to stem from rising incomes and steady consumption rather than any increase in credit stress.
The share of households accessing only formal credit sources has also risen sharply. Formal credit usage climbed to 58.3 per cent, up from 48.7 per cent in September 2024, the highest since the survey began. However, informal borrowing still accounts for about one-fifth of total credit, pointing to the need for further financial inclusion.
Government welfare schemes continue to supplement rural incomes in a significant but non-distortionary manner. Transfers such as subsidised food, electricity, water, cooking gas, fertilizers, pensions and school support contribute nearly 10 per cent of average monthly income. For a section of households, these benefits exceed 20 per cent and play a key role in stabilising demand.
Inflation expectations have eased to their lowest point in a year. Perceived inflation dropped to 3.77 per cent, slipping below the 4 per cent mark for the first time since RECSS began. About 84.2 per cent of respondents said inflation was at or below 5 per cent, and nearly 90 per cent expect it to remain under that threshold in the near future. This moderation has improved real incomes and strengthened purchasing power.
Favourable financial conditions have also supported better loan repayment behaviour. With inflation and interest rates softening, households are spending a smaller share of their income on debt servicing. Capital investment, meanwhile, continues to rise, with 29.3 per cent reporting fresh investments during the year — the highest across all survey rounds.
