Aligarh: Rural households are saving less and borrowing more as prices rise, according to the latest round of a survey commissioned by the National Bank for Agriculture and Rural Development (NABARD). Rural inflation climbed to 6.08% in September from 5.24% in August and 4.84% in July, the report notes, citing data from the Ministry of Statistics and Programme Implementation.The 13th round of the Rural Economic Conditions and Sentiments Survey covered 6,000 households in 600 villages across 28 states and the Union territory of Jammu and Kashmir. Field teams visited them in the last week of August and the first week of September. NABARD’s Department of Economic Analysis and Research designed the survey and the Academy of Management Studies conducted it. The report says the findings reflect household perceptions and “should not be construed as the official views of NABARD”.The round took place amid uneven monsoon rain. As on October 2, 2026, farmers had sown kharif crops over 1,302.47 lakh hectares, 11.04 lakh hectares less than a year earlier, the report says, citing the agriculture ministry. It describes the rural economy as a “mixed but broadly resilient picture”.Fewer households report income gains than in any earlier roundOnly 27.1% of households said their income rose over the preceding year, the lowest share in the survey’s 13 rounds and down from 42.2% in November 2025. Another 20.5% reported a fall and 52.4% saw no change. The net response, which subtracts the share reporting a fall from the share reporting a rise, slid to 6.7 from 7.9 in July and a peak of 26.6 in November 2025.Among households reporting higher income, the average rise was 10.5%, against 13.9% in September 2024. Some 31.9% of them saw gains of under 5%, up from 23.4% two years ago. Savings fall to their smallest share of incomeHouseholds put 12.6% of their monthly income into savings, the lowest share since the survey began in September 2024 and down from 16.8% then. Consumption took 65% of income and loan repayments another 13.2%.Nearly a third of households (32.1%) said their financial savings fell over the year, against 16.7% who reported a rise. The net response on savings dropped to negative 15.4 from negative 10.8 in July. Investment also weakened: 20.2% of households reported lower capital investment, the highest share in the survey, while 23.1% reported higher.More households borrow, and informal loans cost 18.3% a yearThe share of households reporting higher borrowing rose to 32.4% from 28.7% in July, though it remains below the 40.2% of September 2024. More than half (52.6%) relied only on formal sources of credit, up from 51% in July, while 22.1% relied only on informal sources, down from 23.7%. Among the latter, around three-fourths borrowed only from friends and relatives.Informal credit costs more. The average annual interest rate rose to 18.3% from 17.8% in July, with a median of 13%. Among respondents reporting informal loans, 20.4% paid no interest, which the report says suggests borrowing from friends and relatives, but around 18% paid 30% or more.Food takes 53.5% of spending as inflation expectations riseFood accounted for 53.5% of monthly consumption spending on average, within the 52.4-56.7% range of every round since September 2024. Education and health took 24.1% and fuel for cooking and transport 16.6%.Households’ sense of price pressure has sharpened. The average inflation they perceived rose to 5% from 4.5% in July, in line with the official trend, the report says. They expect prices to rise 5% over the next quarter, the highest since the May 2025 round, and 5.9% over the next year, up from 5.8%. The share expecting one-year inflation below 5% fell to 60.6% from 69.2% in July. The report also cites the Food and Agriculture Organisation’s food price index, which stood at 136 points in September, 5.8% above a year earlier.Government transfers make up a smaller share of incomeGovernment subsidies and transfers made up 8.3% of monthly household income on average. That is a marginal rise from 8.1% in July but below 9.3% a year earlier and a peak of 10.3% in January 2025. Only 2.8% of households got more than 20% of their income from transfers, against 7% in September 2025, while 14.9% received none, down from 16.2% in July.The report points to the continuing role of the Centre’s and states’ welfare schemes, including the Pradhan Mantri Kisan Samman Nidhi and the Pradhan Mantri Garib Kalyan Anna Yojana, and stresses “efficient, well-targeted and digitally enabled” delivery.Households stay hopeful about the year aheadOptimism has softened but remains broad. Some 43% of households expect higher income over the next quarter, up from 41.2% in July but well below the 54.1% of September 2024. Over the next year, 67.9% expect an increase, against 66.8% in July. On jobs, 94.8% expect conditions to stay the same or improve, though the net employment outlook of 33.6 is the lowest in the survey.In their assessment of rural development, 45.3% ranked roads first, followed by education (13%) and electricity (8.9%). About three-fourths of households (74.1%) reported better rural infrastructure over the year, though the net response eased to 69.6 from 72.7 in July.Survey begins phased replacement of villagesThis round marked the start of a phased refresh of the sample. In each of the next six rounds, 100 of the 600 villages will be replaced at random with villages from the same districts that have a comparable profile, so that all 600 are new by the sixth round. The report cites rising non-response among households surveyed repeatedly and a shortage of households to sample in some small villages.Replacements were matched on a composite index built from Census 2011 data on the share of Scheduled Caste and Scheduled Tribe population, literacy and the availability of a pucca road and a bank. The report says changes during the transition should be “interpreted with due regard to the phased sample refresh”.Aliya Akbar is an editorial intern at The Wire.