introduction
Financial inclusion, the process of ensuring every individual has access to financial services, has been underway in India since the early 21st century. However, the process has gained momentum under Prime Minister Narendra Modi’s leadership since 2014. All India Rural Financial Inclusion Survey (NAFIS) 2021-22 Nabard has announced the findings of the 2nd All India Rural Financial Inclusion Survey (NAFIS) for 2021. -22, October 9, 2024. Provides primary data based on a survey of 100,000 rural households across 28 states and the Union. Focusing on Jammu and Kashmir and Ladakh regions, various post-COVID-19 economies・Financial indicators are covered.
Mr Navard was conducting the first survey of the agricultural year from July to June 2016. Since then, the economy has implemented numerous policies to support agriculture. NAFIS 2021-22 results reveal how regional economic and financial development indicators have evolved since 2016-17.
Insights from NAFIS 2021-22
1. Increase in average monthly income:
The average monthly income of all households has increased by a significant 57.6% over five years from Rs 100 million. 8,059 crore in 2016-17 to 12,698 in 2021-22, representing an increase of 57.56 per cent. Overall, agricultural households earned slightly more at Rs 13,661 compared to non-agricultural households’ income of Rs 11,438. They earned 19.43% more than non-agricultural households.
The research revealed:
On the other hand, for farmers:
Cultivation is the main source of income, accounting for about one-third of monthly income, with government or private services accounting for one-quarter. wage labor 16%, and; other enterprises 15%.
For non-agricultural households:
Government/private services account for 57% of total household income, and wage labor accounts for approximately 26% of total household income.
2. Increase in average monthly expenses:
The average monthly expenditure of rural households has increased significantly from Rs 100 million. 6,646 crore in 2016-17 to 11,262 in 2021-22, representing an increase of 69.45%.
Agricultural households reported relatively higher consumption expenditures. 11,710 non-agricultural households compared to 10,675 households, which is 9.68% more than non-agricultural households.
3. Increased financial savings:
The average annual economic savings of households increased from Rs 9,104 in 2016-17 to Rs 13,209 in 2021-22, an increase of 45.09%.
Overall, 66% of households reported saving money in 2021-22, compared to 50.6% in 2016-2017.
Inference: Farm households outperform non-farm households in saving, with 71% of farm households reporting savings compared to 58% of non-farm households during the reference period.
4. Possession of Kisan Credit Card (KCC):
Kisan Credit Card (KCC) has emerged as an important tool to promote financial inclusion in the rural agriculture sector, with 44% of agricultural households found to have a valid Kisan Credit Card (KCC). I did.
Among those who owned land of 0.4 hectares or more or had received any agricultural loan from a bank in the past year, 77% reported having a valid KCC.
5. Insurance coverage:
The proportion of households with at least one person covered by some form of insurance increased significantly from 25.5% in 2016-17 to 80.3% in 2021-22. This means that every 5 out of 4 households have at least 1 subscriber.
Agricultural households also outperform non-agricultural households in terms of insurance coverage by a difference of approximately 13 percentage points.
Among the different types of insurance: Vehicle insurance is the most popular, with 55% of households covered by life insurance, increasing to 24% of households, and the penetration rate among agricultural households (26%). It is shown to be slightly higher compared to non-agricultural households (20%). .
6. Scope of pension coverage:
The proportion of households with at least one member receiving some form of pension, including old age, family, retirement or disability, increased from 18.9% in 2016-17 to 23.5% in 2021-22.
Overall, 54% of households with at least one member age 60 or older reported receiving it.
Financial literacy: individuals who demonstrate sound financial behavior
The proportion of respondents demonstrating good financial literacy increased by 17 percentage points, rising from 33.9% in 2016-17 to 51.3% in 2021-22.
Percentage of individuals who exhibit healthy financial behaviors such as:
Manage money effectively. Make informed financial decisions. Expense tracking and; on-time invoice payment rates increased from 56.4% to 72.8% during the period.
When assessing financial knowledge, 58% of rural respondents and 66% of semi-urban respondents reported correctly answering all questions.
epilogue
The NAFIS 2021-22 results highlight the impressive progress the country has made in rural financial inclusion since the last survey in 2016-17.
It reveals that rural households experienced significant increases in income, savings, insurance coverage and financial literacy over a five-year period due to the significant contribution of the government’s various welfare schemes.
Key takeaways from the survey:
Agricultural households earned more than non-agricultural households. Agricultural households reported relatively higher consumption expenditure compared to non-agricultural households. During the reference period, agricultural households exceeded non-agricultural households in terms of savings. It was found that 44% of agricultural households have valid Kisan credit cards. Kisan Credit Card is an important tool to promote financial inclusion in the rural agriculture sector. Agricultural households outperformed non-agricultural households in terms of insurance coverage. The proportion of households with at least one household member receiving some form of pension increased from 18.9% in 2016-17 to 23.5% in 2021-22. The proportion of respondents demonstrating good financial literacy rose from 33.9% in 2016-17 to 51.3% in 2021-22. The percentage of individuals exhibiting healthy financial behavior increased from 56.4% to 72.8%.
This study highlights the importance of continued support and investment in rural development, paving the way to a more prosperous and financially secure future for India’s rural population. Prime Minister Modi’s visionary leadership is therefore commendable for these initiatives that will empower the country’s farmers.
The views expressed above are the author’s own.
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