NABARD ALL INDIA RURAL FINANCIAL INCLUSION SURVEY(NAFIS) FOR 2021-22

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Context: 

The National Bank for Agriculture and Rural Development (NABARD)’s 'NABARD All India Rural Financial Inclusion Survey (NAFIS) for 2021-22' noted that 57% of rural households in the country were engaged in agricultural activities.

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

It is a financial inclusion survey conducted by the Department of Economic Analysis & Research of NABARD.

It provided a detailed study on the status of the rural population in themes which are livelihood and financial inclusion.

It provides a detailed study of various other indicators which include: savings, credit, insurance and pension, remittances, and financial literacy.

Coverage

The survey covers 10,000 village blocks and 710 districts spanning 28 states and Union Territories (UTs) of Jammu & Kashmir (J&K) and Ladakh.

The survey included the rural and semi-rural areas of India including Tier-3 to Tier-6 centres having a population of less than 50,000.

It included both agricultural and non-agricultural households in the study area.

Key Findings of NAFIS 2021-22:

Average Monthly Income Increase:

The average monthly income of households increased substantially by 57.6% over a five-year period, from Rs. 8,059 in 2016-17 to Rs. 12,698 in 2021-22. 

Agricultural households earned Rs. 13,661 while non-agricultural households earned Rs. 11,438.

Income Sources:

• Government/private sector salaries: 37% of total income for all households.
• For agricultural households:
• Agricultural Cultivation: 33%
• Government/private services: 25%
• Wage labor: 16%
• Other works or enterprises: 15%

• For non-agricultural households:

• • • Government/private services: 57%
    • Wage labor: 26%

Income Growth by Land Size trend was:

• Less than 0.01 hectare: 23.5% to 26.8%
• 0.41-1 hectare: 38.2% to 42.2%
• 1.01-2 hectares: 52.5% to 63.9%
• More than 2 hectares: 58.2% to 71.4%

 State-Wise Variations in Income

• High Agricultural Employment States: Chhattisgarh (63.8%), Madhya Pradesh (61.6%), Uttar Pradesh (55.9%), and others show higher reliance on agriculture.
• Low Agricultural Employment States: Goa (8.1%), Kerala (27%), and Punjab (27.2%) report significantly lower agricultural employment.

Average Monthly Expenditure Increase: The average monthly expenditure of rural households significantly increased from Rs. 6,646 in 2016-17 to Rs. 11,262 in 2021-22. 

 Financial Savings Increase: The annual average financial savings of Indian households increased from Rs. 9,104 in 2016-17 to Rs. 13,209 in 2021-22.

Overall, 66% of households reported saving money in 2021-22, compared to 50.6% in 2016-17.  

Agricultural vs. Non-Agricultural Savings: 71% of agricultural households saved, compared to 58% of non-agricultural households.

Variations in Savings among States

• High savings: Uttarakhand (93%), Uttar Pradesh (84%).
• Low savings: Goa (29%), Kerala (35%).

Kisan Credit Card (KCC): The KCC proved to be a key tool for promoting financial inclusion in the agricultural sectors with a total of 44% of agricultural households possessing a valid Kisan Credit Card (KCC). 

Among the landholders with more than 0.4 hectares or the agricultural loan takers from banks in the past year, 77% had a valid KCC.

 Insurance Coverage Increase: The percentage of households with at least one member covered by insurance has seen an increase from 25.5% in 2016-17 to 80.3% in 2021-22. 

This implies that four out of every five households have at least one insured member.  

Pension Coverage increase: The percentage of households with at least one member recipient of pension viz. old age, family, retirement, or disability has seen an increment from 18.9% in 2016-17 to 23.5% in 2021-22. 

Overall, 54% of households with at least one member over the age of 60 years were reported receiving a pension.

Financial Literacy Increase: The percentage of people showing good financial literacy rose by 17 percent, from 33.9% in 2016-17 to 51.3% in 2021-22.  

Conclusion

The NAFIS 2021-22 results show remarkable improvements in rural financial inclusion since the last survey in 2016-17. Rural households have experienced significant increases in income, savings, insurance coverage, and financial literacy. 

Important articles for reference

Pradhan Mantri Kisan Samman Nidhi

Pradhan Mantri Kisan Maan Dhan Yojana

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

Sources:

INDIAN EXPRESS

NABARD

NABARD