More than 88% of rural households now have bank accounts, but only about 24% of them use ATM services at least once in three months, according to a survey by Nabard. Just 7.4% of these households use debit or credit card and 7.5% use cheque to make a payment at least once in three months. According to the All India Financial Inclusion Survey (NAFIS), the annual income of farmers increased 37.4% between 2012-13 and 2015-16. In 2015-16, the annual income was `1,07,172 while the NSSO’s last survey (in 2012-13) had put it at `77,977. The average monthly income of India’s rural households was `8,059 in 2015-16 while the average expenditure stood at `6,646, leaving them with surplus of `1,413 to save or invest. For farmer households which invested more than `10,000 in the year, 60% was funded through borrowings from either institutional or informal source.
Among states, Punjab, Haryana and Kerala are the top three having average monthly income of `23,133, `18,496 and `16,927, respectively, for rural households. Uttar Pradesh is at the bottom at `6,668 per month. Due to high expenditure vis-a-vis income in Andhra Pradesh, a rural household gets an average surplus of measly `95 a month. After meeting all expenditure (as defined by the NSSO which excludes expenses like purchase of land, construction of building, interest and insurance premium payment), a family in Bihar retains `262/month. For Uttar Pradesh, the figure is `315/month. The Nabard survey was conducted in 2016 in 245 districts of 29 states covering 40,327 households. The survey had considered 2015-16 as the reference year and all data are pertained to that year, Nabard said.
Contrary to the perception that a large number of rural population depends on agriculture, the survey found 48% of rural families are agricultural households. A farm household has been defined on the basis of a family earning over `5,000 (value of produce) from agricultural operations. According to the NAFIS, only 12.7% of farmer households have income from one source while the remaining families earn from multiple sources. In contrast, 79.4% of non-agricultural households in rural areas have income from a single source. Agricultural households earned 35% of their income from cultivation while earnings from wage contributed 34%. Other sources of income include government/private service (16%), livestock (8%) and other activities (7%). A farmer family earned 23% more (at `8,931/month) than a household dependent on non-agricultural income (`7269/month), the survey said.
The increase in income of agriculture household despite decrease in the average landholding is significant as it underlines the decrease in absolute poverty, said NITI Aayog vice-chairman Rajiv Kumar, who released the survey. The farm income will further increase if they are able to develop value chain and are provided with marketing facilities at farm gate, he said. The survey results prove that the vision of doubling of farmers’ income is achievable. Incidence of indebtedness, measured as proportion of households reporting outstanding debt on the date of the survey, is 52.5% for agricultural households and 42.8% non-agricultural households. The average amount of outstanding debt for indebted agricultural households was `1,04,602 as on the date of the survey while outstanding debt of a non-agricultural household was lower at `76,731.