India’s rural economy, which showed signs of revival in 2025 owing to a good monsoon before being hit by a sharp dip in crop prices, appears to have found support from the reduction in goods and services tax (GST).
The tax cuts have lowered prices of several categories of major agricultural equipment, boosting sales. They are also expected to spur broader consumption growth across commodities.
According to the eighth round of the National Bank for Agriculture and Rural Development’s (Nabard’s) “Rural Economic Conditions and Sentiments Survey (RECSS)”, released in November, nearly 80 per cent of rural households reported higher consumption over the past year. Consumption now accounts for 67.3 per cent of monthly household income — the highest share since the survey began in September 2024 — aided by GST rate rationalisation.
