A recent survey conducted by the National Bank for Agriculture and Rural Development (NABARD) reveals that the average monthly income of rural households rose by 57.6% over a five-year period.
The second ‘All India Rural Financial Inclusion Survey (NAFIS) 2021-22 found that the average monthly income grew by 57.6%, from Rs 8,059 in 2016-17 to Rs 12,698 in 2021-22.
“Average monthly income of households increased by 57.6% during the five-year period from Rs 8,059 in 2016-17 to Rs 12,698 in 2021-22, suggesting a nominal compound annual growth rate (CAGR) of 9.5 %” said NABARD.
The survey also found that financial savings in rural households improved, with the average annual savings reaching Rs 13,209 in 2021-22, compared to Rs 9,104 five years earlier. A noteworthy 66% of households reported saving in 2021-22, up from 50.6% in 2016-17. However, the proportion of households with outstanding debt rose from 47.4% to 52%.
Insurance coverage among rural households saw a remarkable increase, with the proportion of households having at least one member insured surging from 25.5% in 2016-17 to 80.3% in 2021-22. This growth reflects enhanced access to financial services in rural areas following the COVID pandemic.
Covering a total of one lakh rural households, the survey highlighted an improvement in household income. Alongside rising incomes, household expenditures also grew, with average monthly spending increasing from Rs 6,646 in 2016-17 to Rs 11,262 in 2021-22. Interestingly, the share of food in total consumption declined from 51% to 47%, indicating a shift in spending patterns toward other needs.
The survey noted a rise in reliance on institutional loans, with 75.5% of agricultural households borrowing from institutional sources in 2021-22, up from 60.5% in 2016-17. Conversely, non-institutional borrowing among agricultural households decreased from 30.3% to 23.4%.
The survey also highlighted the effectiveness of the Kisan Credit Card (KCC) in expanding financial inclusion among rural farmers. Pension coverage improved, rising from 18.9% to 23.5% of households. Other notable findings included increased financial literacy and improved financial behavior among respondents, although the average size of landholdings decreased from 1.08 hectares to 0.74 hectares over the five-year period.
(ANI)