The past year has seen a clear strengthening of rural economic fundamentals. With robust consumption, rising incomes, moderating inflation and healthier financial behaviour, rural India is on a positive trajectory, it said.
Sustained welfare support and strong public investment are reinforcing this momentum, the 8th round of NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS) said.About 67 per cent of monthly income is now spent on consumption, the highest share since the survey began, aided by GST rate rationalisation, it said.
The rural consumption demand buoyancy, thus, appears to have received a boost after the GST rate rationalisation, with improved real purchasing power of rural non-farm income due to softer inflation also contributing to the momentum, as per the November 2025 round of the survey. RECSS is a high-frequency, bi-monthly assessment being conducted by NABARD since September 2024.
The survey findings state that loan repayment and capital investment conditions have improved and that 29.3 per cent of rural households have undertaken increased capital investment during the last year, which is the highest level among all rounds of the survey.The pick-up in investment is driven by strong consumption and income gains, not credit stress, it said, adding that rural credit access to formal sources reaches its highest mark.Average inflation perception moderated to 3.77 per cent, falling below 4 per cent for the first time since survey initiation.
About 84 per cent perceive inflation at or below 5 per cent, and nearly 90 per cent expect near-term inflation to remain below 5 per cent, it said, adding that this disinflation has enhanced real income, improved purchasing power, and boosted overall welfare.
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