Rural Spending Rebounds on GST Cuts, Low Inflation; Capital Investment Hits 29%: NABARD

GST rate cuts and easing inflation have accelerated rural spending, with 79.2% of households reporting higher consumption, NABARD’s Rural Economic Conditions & Sentiments Survey – Round 8 (Nov 2025) shows.

Households now allocate 67.83% of monthly income to consumption, the highest share recorded since the survey began. Income trends improved too: 42.2% reported higher earnings, while only 15.7% saw a decline, the lowest level so far. Capital investment strengthened, with 29.3% of families increasing asset creation, signalling rising confidence.

But financial savings have weakened, and short-term expectations have softened. Less than half of respondents expect income or employment to improve over the next three months. Long-term confidence, however, remains strong. More than 75% of rural households expect their earnings to rise within a year, marking the highest optimism in the survey’s history.

Perceptions of inflation continued to ease. Households placed current inflation at 3.77%, and 84% said price rise feels below 5%, with most expecting subdued inflation ahead. Satisfaction with rural infrastructure also stayed high, especially for roads.

NABARD noted: “Just 15.7% reported any income decline — the lowest so far. Future outlook remains exceptionally strong, with 75.9% expecting higher incomes next year.”