India’s rural economy is witnessing a boom due to increased purchasing power, rising incomes, stronger consumption and improved financial behavior, according to a bi monthly survey by NABARD. According to the latest Rural Economic Conditions and Sentiments Survey (RECSS) 80 per cent of rural households reported higher consumption compared with last year.
“Moreover, 67.3 per cent of monthly household income was devoted to consumption expenditure, which is the highest level among all rounds of the survey conducted since September 2024,” the survey noted. It also highlighted that the rural investment activity is accelerating, and the credit access has also improved.
The November 2025 round of the survey was conducted after the GST rate rationalisation announced on 3 September 2025, during the festival season, and against the backdrop of sharp moderation in rural inflation and food deflation. As per the NABARD survey, 42.2 per cent of rural households reported to have experienced an increase in income in the last one year, which is the highest level among all rounds of this survey so far. Importantly, the percentage of households experiencing a decline in income during the last year fell to its lowest level (15.7 per cent ).
While a lower percentage of rural households (21.9 per cent ) reported their savings rising during last year, as against 23.7 per cent in the September 2025 round of the survey, it still showed some improvement relative to all the pre-September 2025 rounds of the survey. There was only a modest increase in the number of households who reported taking recourse to increased borrowings/loans during last year. Thus, it appears that the higher consumption expenditure of rural households was not funded by excessive recourse to borrowings.
Further, only 15.7 per cent reported any decline in income, the lowest so far. “During the next one year, however, the income prospects are seen by them to improve, with 75.9 per cent expecting to witness an increase in income, which is the highest level,” the survey added.
