NABARD All India Rural Financial Inclusion Survey (NAFIS) 2021-22

On 09 October 2024, NABARD released the results of its second All India Rural Financial Inclusion Survey (NAFIS) 2021-22, providing primary survey-based information relating to 1 lakh rural households on several economic and financial indicators for the post-COVID period. Realizing the critical importance of financial inclusion for growth and economic development, NABARD conducted the first such survey for the agricultural year (July- June) 2016-17, results of which were released in August 2018.

Since then, the economy has faced multiple shocks, and wide-ranging policy measures have also been introduced to promote agriculture and enhance rural socio-economic prosperity. The results of NAFIS 2021-22 could help in assessing how different economic and financial indicators of development in rural areas have changed since 2016-17.

Key Highlights of NAFIS 2021-22

• The average monthly income of households increased by 57.6% during the five-year period from Rs 8,059 in 2016-17 to Rs 12,698 in 2021-22, suggesting a nominal compound annual growth rate (CAGR) of 9.5 % (Table 1). Annual average nominal GDP growth during the same period (on financial year basis) was 9%.

• Average monthly expenditure of households increased during the five-year period from Rs 6,646 in 2016-17 to Rs 11,262 in 2021-22.

• The share of food in the consumption basket of households declined from 51% in 2016-17 to 47% in 2021-22.

• Annual average financial savings made by households increased to Rs 13,209 in 2021-22 from Rs 9,104 in 2016-17. 66.0% of households reported to have saved in 2021-22, as against 50.6% in 2016-17.

• The proportion of households who reported to have outstanding debt moved up from 47.4% in 2016-17 to 52.0 % in 2021-22.

• The proportion of agricultural households that took loans from institutional sources only increased from 60.5% in 2016-17 to 75.5% in 2021-22 (the corresponding increase for non-agri households was from 56.7% in 2016-17 to 72.7% in 2021-22). The proportion of Agri-households that took any loan from non-institutional sources only decreased from 30.3% in 2016-17 to 23.4% in 2021- 22.

• Kisan Credit Card (KCC) as a prominent instrument of financial inclusion in the rural farm sector has been found to be very effective. Its coverage has increased significantly during the last five years.

• The proportion of households with at least one member having any type of insurance increased from 25.5% in 2016-17 to 80.3% in 2021-22.

• The proportion of households with at least one member receiving any type of pension (old age, family, retirement, disability, etc) increased from 18.9% in 2016- 17 to 23.5% in 2021-22.

• The proportion of respondents indicating good financial literacy increased by 17 percentage points, i.e., from 33.9% in 2016-17 to 51.3% in 2021-22. The proportion of respondents with sound financial behaviour (such as how they manage money, take financial decisions, monitor expenses and maintain timeliness in paying bills) increased from 56.4% in 2016-17 to 72.8% in 2021-22.

• The average size of landholding declined from 1.08 hectare in 2016-17 to 0.74 hectare in 2021-22.

Key Indicators – NAFIS 2021-22 versus NAFIS 2016-17

*All households as the base for computing averages

NABARD operates with a mission to promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institutional development, and other innovative initiatives.