PIB Summaries 01 August 2025

Content

1. Rising Rural Incomes and Upbeat Sentiments
2. Major Government Initiatives for the Development of North Eastern Region (NER)

Rising Rural Incomes and Upbeat Sentiments

Introduction: Signals of Rural Economic Revival

• The July 2025 RECSS reflects a sharp revival in rural India’s economy.
• 76.6% of rural households reported increased consumption — the highest figure across all six rounds of RECSS.
• RECSS provides micro-level insights into income, credit, savings, and perception patterns in rural households.
• It also evaluates the impact of government welfare schemes on real economic activity.

Relevance : GS 3(Rural Income)

Rural Incomes and Consumption: Signs of Grassroots Growth

Income Trends

• 39.6% of households reported higher income — the highest ever recorded in RECSS.
• Suggests stronger agriculture performance, wage growth, and rural enterprise activity.

Consumption Growth

• 76.6% households noted an increase in consumption over the past year.
• Only 3.2% reported a decline — lowest since the survey’s inception.
• Households now spend 65.57% of income on consumption, up from 60.87% (Sep 2024) → indicates rising purchasing power.

Implication:

• Rising income is translating into actual demand, reinforcing consumption-led rural growth and boosting the broader economy.

Government Support: Key Driver of Resilience

Fiscal Transfers

• Welfare transfers (food, gas, electricity, education, health, pension) account for ~10% of monthly income.
• These schemes cushion low-income households from inflation and income volatility.

Infrastructure Upgrades

• Rural development boosted by visible improvements in roads, water, electricity, education, and healthcare.
• Only 2.6% reported deterioration in basic infrastructure.

Top-Ranked Improvements (Perceived by Households):

1. Road Connectivity
2. Educational Institutions
3. Drinking Water Facilities

Financial Health: Stronger Savings and Formal Credit Penetration

Savings Behaviour

• 20.6% of households reported increased savings.
• 13.18% of income now directed to savings; 11.85% allocated to loan repayments.

Formalization of Credit

• 52.6% sourced loans only from formal institutions (banks, NBFCs, MFIs, cooperatives).
• 26.9% used both formal and informal channels.
• Shows shift away from exploitative lenders, improving borrower protection.

Decline in Informal Interest Rates

• Mean informal interest rates fell to 17.53% (30 bps decline).
• 30% of informal loans carried zero interest, mostly borrowed from friends/relatives.

Optimism in the Countryside: Sentiments at Record High

Short-Term Outlook (Next Quarter)

• 56.4% expect income to improve.
• 56.2% anticipate better job opportunities.

Long-Term Outlook (Next 1 Year)

• 74.7% expect income to increase — highest ever.
• Reflects confidence from favourable monsoon, policy support, and local development.

Inflation and Expenditure Patterns: Signs of Stability

Falling Inflation Perceptions

• Rural CPI dropped from 3.25% (March) → 2.92% (April) → 2.59% (May).
• Households perceived mean inflation at 4.28% in July.
• 78.4% of rural households believe inflation is ≤5%.
• Inflation expectation (next quarter): 4.29% | Next year: 5.51%.

Stable Food Budgets

• Despite rising incomes, the share of food in monthly consumption held steady at 50% (median).
• Indicates diversification of expenditure toward non-food goods/services.

Key Comparisons with Round 1 (Sep 2024)

Policy Implications and Future Outlook

What’s Working:

• Targeted fiscal transfers improving household resilience.
• Infrastructure-led growth feeding optimism.
• Continued formalization of credit reducing rural indebtedness.
• Price stability aiding real income gains.

Way Forward:

• Enhance productivity through skilling, rural enterprise, and digital infrastructure.
• Deepen credit access for women and marginal farmers.
• Focus on value-added agri-processing, local job creation, and climate-resilient infrastructure.
• Monitor inflation-sensitive inputs like fuel and fertilizers for maintaining price stability.

Conclusion

The July 2025 RECSS underscores a clear inflection point in rural India’s economic trajectory. With rising incomes, expanded consumption, growing savings, formal credit access, and record optimism, rural India is showing strong macro and micro resilience. Government policies—both fiscal and infrastructural—have played a decisive role in this transformation. Going forward, sustaining this momentum through skilling, deeper financial access, and diversified livelihoods will be critical for inclusive, bottom-up growth.

Major Government Initiatives for the Development of North Eastern Region (NER)

The Government of India has undertaken a multi-sectoral approach for the holistic development of the North Eastern Region (NER), focusing on connectivity, infrastructure, digital inclusion, and tourism. These initiatives aim to bridge regional disparities and integrate NER with the national growth trajectory.

Relevance : GS 3(Infrastructure , Development)

Road Infrastructure Development

National Highways (MoRT&H)

• Total Constructed: 16,207 km of National Highways across the NER.

Rural Roads (PMGSY)

• Sanctioned:
  • 17,637 road works covering 89,436 km
  • 2,398 bridges
• Completed (as of March 2025):
  • 16,469 road works (80,933 km)
  • 2,108 bridges

Rail Connectivity Expansion (Ministry of Railways)

• Projects Sanctioned: 12 (08 New Line + 04 Doubling)
• Length Covered: 777 km
• Total Cost: ₹69,342 crore
• Progress:
  • 278 km commissioned
  • ₹41,676 crore spent till March 2025

Digital & Mobile Connectivity

Broadband (BharatNet via DBN)

• 6,355 Gram Panchayats made service-ready

Mobile Connectivity

• 3,297 mobile towers commissioned across NER
• Funded via Digital Bharat Nidhi (DBN)

Air Connectivity (UDAN – Regional Connectivity Scheme)

• 90 routes operationalized
• 12 airports/heliports connected across NE states
• Objective: Affordable air travel + enhanced regional integration

Key Central Sector Schemes for NER (via MDoNER)

a) NESIDS (North East Special Infrastructure Development Scheme)

• Two Components:
  • NESIDS (Roads) – Road infrastructure
  • NESIDS (OTRI) – Other than Roads Infrastructure (e.g. water supply, education, health)

b) PM-DevINE (Prime Minister’s Development Initiative for North East Region)

• Launched: Union Budget 2022–23
• Approved: 12 October 2022
• Outlay: ₹6,600 crore over 2022–26 (100% Central funding)

Objectives:

• Infrastructure aligned with PM GatiShakti
• Social development projects based on local needs
• Youth & women livelihoods
• Plug development gaps in critical sectors

c) Schemes of the North Eastern Council (NEC)

• Funding for regional planning, infrastructure, skill & livelihood promotion

d) Special Development Packages (SDPs)

• Targeted interventions for border and underdeveloped areas

Tourism Infrastructure Support

Ministry of Tourism Initiatives (covering NE states):

• Swadesh Darshan & Swadesh Darshan 2.0
• PRASHAD Scheme – Pilgrimage & heritage site development
• CBDD – Challenge Based Destination Development (sub-scheme of SD)
• SASCI – Special Assistance to States for Capital Investment

These schemes complement State Government efforts by offering financial assistance.

MDoNER’s Tourism Support

• Additional funding to NE States under Central Sector Schemes for tourism-specific infrastructure and services.

Summary Snapshot

Strategic Importance

• Boosts Act East Policy through integrated connectivity to Southeast Asia
• Bridges development deficit in remote & border districts
• Empowers youth, women, and rural communities via livelihood & digital access
• Supports tourism & culture for sustainable economic growth
• Enables multi-modal infrastructure through convergence (e.g., PM GatiShakti)