The average monthly income of rural households saw a substantial rise of 57.6% over a five-year period, increasing from Rs 8,059 in 2016-17 to Rs 12,698 in 2021-22, a recent survey by NABARD said.
This indicates a nominal compound annual growth rate (CAGR) of 9.5%.
According to NABARD’s latest All India Rural Financial Inclusion Survey (NAFIS), the annual average nominal GDP growth during the same period was 9%.
When considering all households together, the average monthly income stood at Rs 12,698, with agricultural households earning slightly more at Rs 13,661, compared to Rs 11,438 for non-agricultural households.
Salaried employment in the government or private sector was the largest income source for all households, accounting for approximately 37% of their total income.
For agricultural households, cultivation was the main income source, accounting for about one-third of their monthly earnings, followed by government or private services contributing one-fourth share, wage labour (16%), and other enterprises (15%), the report highlighted.
Among non-agricultural households, government/private service contributed 57% of the total household income, followed by wage labour, which accounted for roughly 26% of the total income.
Furthermore, the average monthly expenditure of rural households rose significantly from Rs 6,646 in 2016-17 to Rs 11,262 in 2021-22.
The agricultural households reported a relatively higher consumption expenditure of Rs 11,710 than Rs 10,675 for non-agricultural households.
The annual average financial savings of households increased to Rs 13,209 in 2021-22 from Rs 9,104 in 2016-17. Overall, 66% of households reported saving money in 2021-22, compared to 50.6% in 2016-17.
The report also highlighted that the Kisan Credit Card (KCC) has emerged as a key tool for promoting financial inclusion in the rural agricultural sector, showing substantial growth in coverage over the past five years.
In total, 44% of agricultural households were found to possess a valid Kisan Credit Card (KCC).
The percentage of households with at least one member covered by any form of insurance increased significantly from 25.5% in 2016-17 to 80.3% in 2021-22.
The percentage of households with at least one member receiving any form of pension increased from 18.9% in 2016-17 to 23.5% in 2021-22.
Also, the percentage of respondents demonstrating good financial literacy increased by 17 percentage points, rising from 33.9% in 2016-17 to 51.3% in 2021-22.