Nearly 90% of rural homes in India have savings accounts in banks: Report

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By DILSHER DHILLON

  • Around 88% of rural households in India are estimated to have a savings account at an accredited financial institution, according to a report by NABARD.
  • 40,327 households in 29 states participated in the All-India Rural Financial Inclusion Survey for 2016-17.
  • The survey found that farming households in rural areas earn about ₹107,172 on an annual basis, which is around 23% more than non-farming rural households.

It looks like savings culture has penetrated rural India. Around 88% of rural households in India are estimated to have a savings account at an accredited financial institution, according to a report by the National Bank for Agriculture and Rural Development (NABARD), a development bank that is a key facilitator of the government’s financial inclusion agenda. The average annual savings for a rural household was found to be ₹17,488.

Around 40,327 households in 29 states participated in the All-India Rural Financial Inclusion Survey for 2016-17, the results of which indicated that agriculture was still a viable livelihood in rural India.

The survey found that farming households in rural areas earn about ₹107,172 on an annual basis, which is around 23% more than non-farming rural households.

Nearly half of all rural households were found to be engaged in agricultural activities of some kind, contradicting the popular belief that almost all rural households are engaged in some form of agriculture or the other.

The report also mapped the financial practices of rural families. A little over 47% of rural households reported the incidence of outstanding debt. Despite the higher earning capacity, agricultural households were found to be more indebted than non-agricultural ones. The average level of debt for a rural household was found to be ₹91,407, with the amount rising to ₹104,602 for farming families.

Only a quarter were found to be covered under some form of insurance or pension scheme. Additionally, 33% of households reported having more than one savings account, while 26% had savings accounts operated by female family members.

There was also a breakdown by each state. Punjab, Haryana and Kerala were found to have the wealthiest rural households, earning an average monthly income of ₹23,133, ₹18,496 and ₹16,927, respectively. The states of Jharkhand, Andhra Pradesh and Uttar Pradesh reported the lowest average monthly incomes for rural farmers.

Source: Business Insider India

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