New Delhi, January 8 (IANS). Rural income will get support in FY26 due to strong agricultural income and purchasing power will improve due to low inflation and possibility of reduction in interest rates. This information was given in the report released on Wednesday.
The real private consumption rate in the current financial year is at 7.3 percent, which was 4 percent in the last financial year.
“The good thing is that some of the factors that support consumption recovery in the short term have also turned supportive,” according to a CRISIL Market Intelligence & Analytics report.
Growth in government consumption expenditure increased to 4.1 percent this fiscal year from 2.5 percent last fiscal year, supporting the improvement in private consumption growth.
In the last few financial years, government revenue expenditure on welfare schemes like NREGA, rural roads and housing construction generated employment and boosted rural demand.
To keep private consumption strong in FY26, government spending should be on employment generation schemes.
The agricultural economy performed well this financial year due to good rains in the south-west and a good kharif crop. Good soil moisture and good reservoir levels are also benefiting the Rabi crop.
“The government’s first advance estimates suggest agricultural GVA will grow by 3.8 per cent this fiscal year, which will boost rural incomes and demand,” the report said.
According to the report, the next financial year is expected to see less weather disturbances, assuming that the recently-introduced La Nina effect has a positive impact on the south-west monsoon. We expect agricultural production and incomes to remain strong and continue to support rural consumption.
–IANS
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