NABARD Survey: GST Relief, Low Inflation Spur Rural Spending; Capital Investment Jumps to 29%

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

Households are now spending 67.83% of their monthly income on consumption, the highest share recorded since the survey began.

Income indicators strengthened as well. 42.2% of rural families reported higher earnings, while only 15.7% saw a decline — the lowest proportion of income drops captured so far. Capital investment also improved, with 29.3% of households increasing asset creation, reflecting improved financial confidence.

However, savings weakened and short-term expectations softened, with fewer than half expecting an improvement in income or employment over the next three months.

Despite this, long-term sentiment remains robust. Over 75% of households expect income to rise in the next year, marking the strongest optimism since September 2024.

Inflation perceptions have declined sharply. Households pegged current inflation at a mean 3.77%, the lowest reading yet, and 84% said price rise feels below 5%. A majority also expect inflation to remain subdued in the coming months.

Satisfaction with rural infrastructure continues to stay high, with roads rated as the best-performing service.

“Only 15.7% reported any type of income decline — the lowest so far. Future outlook is exceptionally strong, with 75.9% expecting incomes to rise next year, the highest optimism since September 2024,” the survey noted.