PIB Summary - 1st August 2025 | PIB (Press Information Bureau) Summary - UPSC PDF Download

Rising Rural Incomes and Upbeat Sentiments

 Introduction: Signals of Rural Economic Revival 

•  The July 2025 Round of the Rural Economic and Consumer Sentiment Survey (RECSS) shows a strong recovery in rural India’s economy. 
•  A significant 76.6% of rural households reported increased consumption, marking the highest level across all six rounds of the survey. 
•  The RECSS offers detailed insights into various aspects of rural households, including income, credit, savings, and perceptions. 
•  It also assesses the impact of government welfare schemes on real economic activities in rural areas. 

 Rural Incomes and Consumption: Signs of Grassroots Growth 

 Income Trends 

•  The survey indicates that 39.6% of households experienced higher income levels, which is the highest recorded in the survey’s history. 
•  This suggests improvements in agricultural performance, wage growth, and activities related to rural enterprises. 

 Consumption Growth 

•  A remarkable 76.6% of households reported an increase in consumption over the past year. 
•  Only 3.2% reported a decline, the lowest since the survey began. 
•  Households are now spending 65.57% of their income on consumption, an increase from 60.87% in September 2024, indicating a rise in purchasing power. 

Implication:

•  The increase in income is translating into actual demand, reinforcing consumption-led growth in rural areas and contributing to the broader economy. 

 Government Support: Key Driver of Resilience 

 Fiscal Transfers 

•  Welfare transfers, including food, gas, electricity, education, health, and pensions, make up approximately 10% of monthly income for households. 
•  These transfers help low-income households cope with inflation and income fluctuations. 

 Infrastructure Upgrades 

 Rural development has been enhanced by noticeable improvements in roads, water supply, electricity, education, and healthcare facilities. 

•  Only 2.6% of households reported a decline in basic infrastructure. 
•  The top-ranked improvements, as perceived by households, include road connectivity, educational institutions, and drinking water facilities.

 Financial Health: Stronger Savings and Formal Credit Penetration 

 Savings Behaviour 

• 20.6% of households reported an increase in savings, with 13.18% of income now directed toward savings and 11.85% allocated for loan repayments. 

 Formalization of Credit 

• 52.6% of households sourced loans exclusively from formal institutions such as banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs), and cooperatives. 
• 26.9% used a combination of formal and informal channels. 
•  This shift indicates a move away from exploitative lenders, enhancing borrower protection. 

 Decline in Informal Interest Rates 

•  The average informal interest rate decreased to 17.53%, a 30 basis points decline. 
• 30% of informal loans had zero interest, primarily borrowed from friends or 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, the highest ever recorded. 

 This optimism reflects confidence in favorable factors such as the monsoon, policy support, and local development initiatives. 

 Inflation and Expenditure Patterns: Signs of Stability 

 Falling Inflation Perceptions 

•  The Rural Consumer Price Index (CPI) decreased from 3.25% in March to 2.92% in April and 2.59% in May. 
•  Households perceived the mean inflation rate at 4.28% in July. 
• 78.4% of rural households believe inflation is 5% or lower. 
•  Inflation expectations for the next quarter and next year are 4.29% and 5.51%, respectively. 

 Stable Food Budgets 

•  Despite rising incomes, the share of food in monthly consumption remained steady at 50% (median). 
•  This indicates a diversification of expenditure towards non-food goods and services. 

 Key Comparisons with Round 1 (Sep 2024) 

 Policy Implications and Future Outlook 

What’s Working:

•  Targeted fiscal transfers are enhancing household resilience. 
•  Infrastructure-led growth is fostering optimism. 
•  Continued formalization of credit is reducing rural indebtedness. 
•  Price stability is contributing to real income gains. 

Way Forward:

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

 Conclusion 

•  The July 2025 RECSS highlights a significant turning point in the economic trajectory of rural India. 
• With increases in income, consumption, savings, formal credit access, and a surge in optimism, rural areas are demonstrating strong resilience both at the macro and micro levels. 
• Government policies, encompassing both fiscal measures and infrastructure improvements, have been instrumental in driving this change.
• Moving forward, it will be crucial to sustain this momentum through initiatives focused on skill development, broader financial access, and diversified livelihood opportunities to ensure inclusive and bottom-up growth. 

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

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)

• 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) 
• 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 
• Schemes of the North Eastern Council (NEC)
•  Funding for regional planning, infrastructure, skill & livelihood promotion 
• 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 

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)