Subsidies make for 10% of avg rural household income in India

Government subsidies contribute, on average, 10% of a rural household’s income in India, according to the Rural Economic Conditions and Sentiments Survey (RECSS) conducted by the National Bank for Agriculture and Rural Development (NABARD), a state-owned institution set up to supervise agriculture credit.

The same survey, conducted every two months since September 2024, showed that some households rely on government welfare for over 20% of their income, making it a significant source of livelihood.

The number is significant given that 2025 was a year of good monsoon and low inflation.

The Finance Ministry had allocated 6% of the country’s ₹50 lakh crore budget for major subsidies in the financial year ending March 2026.

42.2% of rural households experienced income growth, the most recorded since the beginning of the survey more than two years ago. The average income of rural households in India was ₹12,698 a month, according to data for FY22 released in October 2024.

15.7% reported an income decline of any type, the lowest in the RECSS surveys so far.

India had over 179.7 million households, according to the 2011 Census, 38.4% of them were landless and derived their income from manual labour. They now spend over two-thirds of their income, 67.3% to be precise, on consumption, according to the latest RECSS survey.

Food accounts for half of all a rural household’s monthly expenditure.

The proportion of rural households accessing formal credit has gone up to 58.3% in the latest survey, compared to 48.7% in September 2024. “However, the share of informal credit is about 20%, underscoring the need for continued push for deeper formal credit penetration,” the report added.