The impact of the West Asia war on rural households’ sentiments has been evident with only 29.6% of households reporting an increase in income during the last one year, according to the latest survey conducted by the National Bank for Agriculture and Rural Development (Nabard).
This represents the lowest level of people’s reported rise in income since the survey commenced in September, 2024, the Nabard bio-monthly survey, titled ‘Rural Economic Conditions and Sentiments’ stated. In the November, 2025 round of survey, 42.2% of households (highest) reported an increase in income in the last one year.
In the current round of the survey, the lowest percentage of households (40.7%) expect their income and employment conditions to improve over the next quarter, relative to all previous rounds of the survey conducted so far.
“The responses accordingly reflect the perceived concerns of rural households, given the still unfolding but uncertain scale and nature of the spillover impact of global geopolitical developments on India,” the survey, which was conducted during the last few days of April 2026 and the first few days of May 2026, noted.
Macro Headwinds
Nabard stated that the response for the survey was conducted in an atmosphere of press reports highlighting the impact of the West Asia such as job losses in commercial establishments due to shortage of LPG, likely eventual increase in prices of petrol, diesel and LPG, possible restricted availability of chemical fertilisers during the kharif sowing season and overall stagflationary risk of higher inflations, lower growth of economy and forecast of below normal rainfall.
About 70.7 % of rural households, however, expect their income situation to improve during the next one year, indicating that they expect the adverse impact of the war in West Asia to dampen income and employment prospects only in the short run, it stated. Only 7.3% of the households reported a possibility of decrease in income next year.
In November, 2025, the highest number of rural households (75.9%) since the survey began in September, 2024, expected their income to increase in the next one year. According to the survey, it could be one of the reasons why consumption demand in the rural economy remains so resilient so far.
Structural Realities
The 50.9% of the respondents or rural households relied exclusively on formal sources of credit whereas the share of those taking recourse to both institutional and non-institutional sources of credit moved up to 27.2%. “About 21.9% of rural households borrow only from non-institutional sources, and about two thirds of which seems to be from friends and relatives,” it noted.
One year ahead average inflation expectations also have risen sharply to 5.53% from 4.38% in the previous round of the survey, a level last reported in July 2025.