NABARD NAFIS Survey 2024 on Financial Inclusion [Download PDF]

NABARD has released the findings of its second All India Rural Financial Inclusion Survey (NAFIS) for 2021-22, providing critical insights into rural economic and financial indicators in the post-COVID era. This survey, covering 1 lakh rural households across all 28 states and the Union Territories of Jammu & Kashmir and Ladakh, builds upon the foundation of the first NAFIS conducted for 2016-17, whose results were published in August 2018. Over the past five years, numerous policies and initiatives have aimed to bolster rural socio-economic development. The 2021-22 findings reflect the progress made during this period and highlight key trends in rural financial inclusion.

Key Findings of NAFIS 2021-22

1. Rise in Average Monthly Income

• Rural household incomes grew significantly by 57.6% over five years, with the average monthly income rising from ₹8,059 in 2016-17 to ₹12,698 in 2021-22, marking a nominal CAGR of 9.5%.
• Agricultural households earned slightly higher (₹13,661) compared to non-agricultural households (₹11,438).
• Salaried employment contributed 37% of total income for all households. Among agricultural households, cultivation accounted for one-third of income, while non-agricultural households relied heavily on salaried employment (57%).

2. Increase in Monthly Expenditure

• Monthly household expenditures rose from ₹6,646 in 2016-17 to ₹11,262 in 2021-22.
• Agricultural households reported higher expenditure levels (₹11,710) than non-agricultural ones (₹10,675). Goa and Jammu & Kashmir recorded the highest household expenditures, exceeding ₹17,000 per month.

3. Growth in Financial Savings

• Average annual financial savings rose from ₹9,104 in 2016-17 to ₹13,209 in 2021-22.
• Households reporting savings increased from 50.6% to 66%. Agricultural households led with 71% saving money, compared to 58% of non-agricultural households.
• States like Uttarakhand (93%), Uttar Pradesh (84%), and Jharkhand (83%) showed high savings rates, while Goa (29%) and Kerala (35%) lagged.

4. Kisan Credit Card (KCC) Adoption

• KCC coverage expanded significantly, with 44% of agricultural households owning a valid KCC. Among those with landholdings above 0.4 hectares or who had taken agricultural loans, 77% possessed a valid card.

5. Insurance Coverage

• Insurance penetration surged, with 80.3% of households reporting at least one insured member in 2021-22, up from 25.5% in 2016-17.
• Agricultural households showed a higher insurance uptake (26%) compared to non-agricultural ones (20%). Vehicle insurance was the most common, covering 55% of households.

6. Pension Coverage

• Households with at least one member receiving a pension increased from 18.9% in 2016-17 to 23.5% in 2021-22. Among households with senior members (60+ years), 54% reported receiving a pension.

7. Financial Literacy

• Financial literacy improved significantly, with the proportion of respondents demonstrating good financial knowledge rising from 33.9% to 51.3%.
• Individuals showcasing sound financial behavior—such as budgeting, tracking expenses, and timely bill payments—increased from 56.4% to 72.8%.

Conclusion

The NAFIS 2021-22 survey underscores the impressive strides in rural financial inclusion, highlighting notable improvements in income, savings, expenditure, insurance, pensions, and financial literacy. Government welfare schemes such as Pradhan Mantri Kisan Samman Nidhi, MGNREGS, and PMAY-G have played a pivotal role in enhancing rural livelihoods.

As financial services reach deeper into rural areas, the potential for economic empowerment continues to grow. The findings emphasize the importance of sustained policy support and investments in rural development, paving the way for a prosperous and financially secure future for India’s rural communities.

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