First All India Rural Financial Inclusion Survey by NABARD Indicates 88% Rural Households Have Savings Account
New Delhi | August 2018
NABARD All India Financial Inclusion Survey (NAFIS), conducted by National Bank for Agriculture and Rural Development (NABARD), revealed that farm households register higher income than the families solely dependent on non-farm livelihood activities in rural areas. Dr. Rajiv Kumar, Vice Chairman, NITI Aayog released the NAFIS report at a function held at India Habitat Centre in New Delhi today. 
The survey, with reference year of 2015-16, which covered 40,327 rural households, highlighted that the average annual income of an agricultural household is Rs 1,07,172 compared to Rs 87,228 for families engaged only in non-agricultural activities. The survey defined farm households as families having over Rs 5,000 as value of produce from agricultural operations in the year preceding the survey. For all rural households, the average annual income stood at Rs 96,708. The 48 percent of the rural families are agricultural households.
Apart from assessing the income levels of rural households, the survey mapped aspects like debt, saving, investment, insurance, pension and financial aptitude and behaviour of individuals. 
Incidence of Indebtedness (IOI), which is a proportion of households having outstanding debt on the date of the survey, was 52.5 percent and 42.8 percent for agricultural and non-agricultural households respectively.  All India IOI taking rural households together stood at 47.4 per cent. 
While 88.1 per cent rural households and 55 percent agricultural households reported having a bank account, average savings per annum per household was Rs 17,488. About 26 percent of agricultural households and 25 percent of non-agricultural households were found to have been covered under insurance. Similarly, 20.1 percent agricultural households as against 18.9 percent non-agricultural households have subscribed to pension schemes.
Notably, the survey was conducted on a pan-India basis drawing samples from as many as 2016 villages in 245 districts and 29 states.  A population of 1,87,518 was covered in the process. The data was collected through the paperless method of Computer Aided Personal Interview. The survey was commissioned in 2016. 
Dr. Rajiv Kumar, Vice Chairman, NITI Aayog appreciated NABARD for its multifaceted activities and emerging as knowledge partner.  He highlighted that as per the NAFIS survey, the increase in income of agriculture household despite decrease in average landholding, is significant as it underlines the enhanced income level of farmers which can lead to reduction in absolute poverty. The farm income will further increase if they are able to develop value chain and provide marketing facilities at farm gate. The survey results also indicate that the vision of Hon’ble Prime Minister doubling of farmers’ income is achievable. He emphasized the importance of animal husbandry as it contributed to farmers’ income and it also reinforces the Government of India Dairy Infrastructure Development Fund of Rs.8000 cr. 
Dr  H K Bhanwala, Chairman NABARD underlined that the survey is a pioneering attempt to bring together Financial Inclusion and rural livelihood aspects. NABARD proposes to carry out the survey every 3 years. The findings reveal that there is an increase in agriculture household income significantly, with higher increase observed among marginal and small farmers. Dr Bhanwala also highlighted that the Survey was designed through a process of consultation with RBI and other key stake holders. He also shared that the survey is pointing towards greater financial inclusion and increasing share of formal credit in the borrowings of the agricultural households.
Shri Nachiket Mor, appreciated the survey for its incisive findings. He indicated that world has now changed in terms of financial inclusion. India has also changed from its abject poverty to low income middle class. He appreciated NABARD is a dynamic institution and passionate about rural development.
He touched upon important points that there is a need for evidence based policies formation and there was a need to develop a real time /high frequency data flow., (ii) There is a need for consistency in data collection by different agencies and that there is a need for a nodal agency to monitor/ collate data published by various agencies in agriculture sector.
Shri H R Dave, Deputy Managing Director, NABARD indicated that NABARD would continue to work as knowledge partner with the stake holders, enhance its efforts at linking financial sector with rural sector and would be willing to coordinate data assimilation among various agencies and academia. 
Professor Vijay Sharma, Chairman, CACP, appreciating the initiative and said that such surveys will enrich informed policy making by the governments. 
Highlights of NAFIS 2016-17
Agricultural households, which accounted for 48% of rural households, earned Rs 107,172 during 2015-16 from cultivation, livestock, non-farm sector activities and wages/salaries. Thus, farmers’ income grew at a compounded growth rate of 12% per annum compared to Rs 77,112 per annum as per NSSO assessment in 2012-13.  The income levels for 19 out of 29 states are above all India average and 15 states recorded annual compound growth of above 10.5% between 2012-13 and 2015-16.
Agricultural households earned 34% of their income from cultivation. Wage earnings contributed the same proportion to the income followed by salaries (16%), livestock (8%) and non-farm sector (6%). Other sources accounted for the rest.
Non-agricultural households reported average annual income of Rs 87,228 majorly contributed by wages (54%), followed by salaries (32%) and non-farm sector activities (12%).  Agricultural households earned 23% more than non-agricultural households.
Savings & Investment
88.1 per cent of the households reported having a bank account.
33% households reported more than one savings account
26% of HH have women with institutional (including SHG) savings account 
55 per cent of agricultural households reported any savings during the last year and of these 53 per cent saved with institutions like banks, post offices and SHGs. 
Average savings per annum per saver households was reportedly Rs 17,488, of which 95 per cent is with institutional agencies
10.4 per cent of agricultural households also reported investment with the average investment per investing agricultural households was reportedly Rs 62,734.
For all investments amounting more than Rs 10,000 in the year, 60% of the amount was funded through borrowings from either institutional or informal sources.
Incidence of Indebtedness (IOI), measured as proportion of households reporting outstanding debt on the date of the survey, is 52.5% for agricultural households and 42.8% non-agricultural households were reportedly indebted at the time of survey.  All India IOI taking all rural households together stands at 47.4%.
Average amount of outstanding debt (AOD) for indebted agricultural households is reportedly Rs 1,04,602 as on the date of the survey. Debt outstanding for indebted non-agricultural households is reportedly Rs 76,731. Overall extent of indebtedness taking all households combined is Rs 91,407.
43.5% agricultural households reported to have borrowed any money during last year from some source or the other. 60.4% of them reportedly borrowed from institutional sources exclusively.  Further, 30.3% borrowed from only informal sources and 9.2% of agricultural households borrowed from both sources. 56.7% of Non-Agricultural households and 58.6% of all households borrowed from institutional sources during last year.
During the year 2015-16, a borrowing Agricultural households reportedly availed a loan of Rs 107,083 from various agencies, 72% of which was availed from institutional sources including MFIs and SHGs. 69% of borrowings of all households and 65% of non-agricultural households were from institutional sources.
Insurance and Pension
About 26% of agricultural households and 25% of non-agricultural households reported to have been covered under one or the other type of insurance
Among agricultural households who reported to have taken any loan for agricultural purposes in the last one year [2015-16] from institutional agencies, 6.9% reported being covered under crop insurance.
The coverage under any type of pension was reported to be about 18.9 % for non-agricultural households as against 20.1 % for agricultural households
When assessed for type of pension received, 32% of all households with senior citizens reported being covered by old age pension
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