Rural India's Financial Leap: NABARD Reveals 57.6% Progress

Income and Expenditure Growth

• Average monthly income of rural households increased by 57.6% from ₹8,059 in 2016-17 to ₹12,698 in 2021-22
• Nominal compound annual growth rate (CAGR) of 9.5%
• Agricultural households earned slightly more (₹13,661) than non-agricultural households (₹11,438)
• Salaried employment in government or private sector is the largest income source (37%) for all households
• Average monthly expenditure rose from ₹6,646 to ₹11,262
• Food's share in total consumption dropped from 51% to 47%

Financial Inclusion and Savings

• Annual average financial savings increased from ₹9,104 to ₹13,209
• 66% of households reported saving money in 2021-22, up from 50.6% in 2016-17
• 71% of agricultural households saved money compared to 58% of non-agricultural households
• Kisan Credit Card (KCC) emerged as a key tool for financial inclusion in rural agriculture
• 44% of agricultural households possess a valid KCC
• 77% of households with land holdings >0.4 hectares or recent agricultural loans have a valid KCC

Insurance and Pension Coverage

• Households with at least one insured member increased from 25.5% to 80.3%
• Vehicle insurance most prevalent (55% of households)
• Life insurance coverage extended to 24% of households
• Pension coverage increased from 18.9% to 23.5%
• 54% of households with members over 60 years old receive pensions
• Agricultural households outperformed non-agricultural ones in insurance coverage by 13 percentage points

Financial Literacy and Borrowing Trends

• Respondents demonstrating good financial literacy increased from 33.9% to 51.3%
• Sound financial behavior improved from 56.4% to 72.8%
• 58% of rural and 66% of semi-urban respondents answered all financial knowledge questions correctly
• Institutional borrowing among agricultural households rose from 60.5% to 75.5%
• Non-institutional borrowing decreased from 30.3% to 23.4%
• Proportion of households with outstanding debt increased from 47.4% to 52%