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TMI BlogEmpowering Rural India: NABARD Survey on Rural Financial InclusionX X X X Extracts X X X X X X X X Extracts X X X X ..... Empowering Rural India: NABARD Survey on Rural Financial Inclusion X X X X Extracts X X X X X X X X Extracts X X X X ..... 021-22 results could help to shed light on how rural economic and financial development indicators have evolved since 2016-17. The survey included all 28 states and the Union Territories of Jammu & Kashmir and Ladakh. Strengthening Rural Population: Insights from the NAFIS 2021-22 Increase in Average Monthly Income: The average monthly income of 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. This indicates a nominal compound annual growth rate (CAGR) of 9.5%. Annual average nominal GDP growth during the same period (on financial year basis) was 9%. When considering all households together, the average monthly income stood at Rs. 12,698, with agricultural h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouseholds 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, making up about one-third of their monthly earnings, followed by government or private services contributing one-fourth share, wage labor (16%), and other enterprises (15%). Among the non-agricultural ones, it was the Government/ private service which contributed 57% of the total household income, followed by wage labour which made up for roughly 26% of the total income. Rise in Average Monthly Expenditure: The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verage 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. In states like Goa and Jammu & Kashmir, the monthly household expenditure exceeded Rs. 17,000. Overall, agricultural households demonstrated both higher income and expenditure levels than non-agricultural households. Increase in Financial Savings: 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. Agricultural households outperforme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d non-agricultural ones in terms of savings, with 71% of agricultural households reporting savings during the reference period, compared to 58% of non-agricultural households. In 11 states, 70% or more households saved money, with Uttarakhand (93%), Uttar Pradesh (84%), and Jharkhand (83%) leading. In contrast, states like Goa (29%), Kerala (35%), Mizoram (35%), Gujarat (37%), Maharashtra (40%), and Tripura (46%) saw less than half of households reporting savings. Kisan Credit Card (KCC): 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 val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Kisan Credit Card (KCC). Among those with land holdings greater than 0.4 hectares or those who had taken any agricultural loans from banks in the past year, 77% reported having a valid KCC. Insurance Coverage: 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. This means that four out of every five households had at least one insured member. Agricultural households outperformed their non-agricultural counterparts by a margin of roughly 13 percentage points. Among different types of insurance, vehicle insurance was the most prevalent, with 55% of households covered. Life insurance coverage extended to 24% of households, with agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l households showing slightly higher penetration (26%) compared to non-agricultural ones (20%). Pension Coverage: Pensions significantly enhance recipients' quality of life by offering financial support and reducing dependency on others, thereby boosting their self-worth and confidence. The percentage of households with at least one member receiving any form of pension (such as old age, family, retirement, or disability) increased from 18.9% in 2016-17 to 23.5% in 2021-22. Overall, 54% of households with at least one member over 60 years old reported receiving it, highlighting the importance of pensions in supporting elderly members of society. Financial Literacy: The percentage of respondents demonstrating good financial literacy inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reased by 17 percentage points, rising from 33.9% in 2016-17 to 51.3% in 2021-22. The proportion of individuals exhibiting sound financial behavior- such as managing money effectively, making informed financial decisions, tracking expenses, and paying bills on time--also increased from 56.4% to 72.8% during the same period. When assessed on financial knowledge, 58% of respondents from rural areas and 66% from semi-urban areas answered all questions correctly. Conclusion The NAFIS 2021-22 results highlight the remarkable strides made in rural financial inclusion since the last survey in 2016-17. Rural households have experienced notable improvements in income, savings, insurance coverage, and financial literacy. The Government welfare sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes like Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Kisan MaanDhan Yojana, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Awas Yojana-Gramin (PMAY-G), Pradhan Mantri Gram Sadak Yojana (PMGSY), Deendayal Antyodaya Yojana- National Rural Livelihoods Mission (DAY NRLM), Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) have significantly contributed to improving the lives of the rural population. As access to financial services continues to expand, there is a bright outlook for the economic empowerment of these households. The survey underscores the importance of ongoing support and investment in rural development, paving the way for a more prosperous and financially secure future for India's ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral population.
References
https://www.nabard.org/PressReleases-article.aspx?id=25&cid=554&EID=91
https://www.nabard.org/auth/writereaddata/tender/pub_0910240156351156.pdf X X X X Extracts X X X X X X X X Extracts X X X X
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