Over 72.8% of rural households expect their income to increase in the next year, according to a bi-monthly survey conducted by the National Bank for Agriculture and Rural Development (Nabard) in September 2025.
This represents a slight decline from 74.7% of rural households who had expressed optimism about income growth in the July 2025 round of the survey. A year ago, 70.2% of respondents expected their income to rise.
While a slightly lower percentage of households reported expectations of higher income, the Nabard survey, titled Rural Economic Conditions and Sentiments, noted: “It is possible that Trump tariff-related risks for the farm and non-farm exports, and the associated impact on rural income and employment, might have dampened the sentiments of rural households expressed through this survey.”
The percentage of households reporting a decrease in income over the last year fell to 18% in September 2025, the lowest level recorded since the survey began in September 2024. A year ago, 23.8% of rural households reported a fall in income.
However, 44.5% of rural households reported stagnation in income, the highest proportion recorded in all seven surveys conducted over the past year. According to the survey, 37.5% of households reported an actual increase in income in the last year, compared with 37.6% a year ago.
Consumption, savings, and credit trends
In the September 2025 round, over 76.2% of rural households reported an increase in consumption over the past year, a slight decline from 76.6% in July 2025. In September 2024, more than 80% of respondents had reported higher consumption.
“While the consumption-led buoyancy in the rural economy continues, there is some slackening of momentum in recent months, partly reflecting the impact of severe floods and landslides in a few states, including Himachal Pradesh and Punjab,” Nabard said.
A major part of the survey was completed before the announcement of the GST reduction on September 3, 2025. Therefore, household responses do not reflect the expected positive impact of the measure on consumption.
Part of the moderation in the percentage of households reporting higher consumption could also be due to a higher proportion (23.7%) of households reporting an increase in savings, and a lower percentage (34.5%) reporting an increase in borrowings.
The share of households taking loans solely from formal sources reached 54.5% in September 2025. Meanwhile, the average interest rate on informal credit remained around 17–18% for the 21.8% of households that borrowed only from informal sources.
Infrastructure and policy support
A high percentage of rural households (76.2%) continued to report improvements in rural infrastructure over the past year, the survey added.
The survey compiled household responses on five key parameters—consumption, income, savings, investment, and borrowings—to assess the current state of the rural economy.
Income and consumption among rural households are supported by various fiscal transfer schemes in both cash and kind, provided by the central and state governments. These include free or subsidized provision of food, water, electricity, cooking gas, fertilizer, interest subventions, school uniforms, books, computers, public transportation, mid-day meals, student scholarships, and pensions for the elderly, widows, disabled, and artisans.