Rural India is transitioning swiftly from agri-centric economy to services led economy: HDFC Securities Report

New Delhi [India], July 1 (ANI): Rural India is showing strong signs of economic progress. A report from HDFC Securities suggests that in 112 rural districts, home to nearly 291 million people, the average income per person has now crossed USD 2,000.

The report noted that this rise in income is expected to boost demand for non-essential products and services like smartphones, vehicles, and branded goods.

States like Maharashtra, Tamil Nadu, Kerala, and Andhra Pradesh are leading this rural growth story due to their strong economies and development plans. Almost every Indian state now has a rural per capita income above USD 2,000, except Uttar Pradesh and Madhya Pradesh.

The rural industry sector, worth INR 29 trillion in FY25, grew at 7.1 per cent over three years. Manufacturing was slow at 5 per cent growth, but construction (8.7 per cent), utilities (6.9 per cent), and mining (13.5 per cent) performed well.

Uttar Pradesh led the way with 10.6 per cent growth in the industrial sector, while Tamil Nadu and Rajasthan followed with around 8 per cent. Kerala saw slower growth at 3.7 per cent. Income from the industry sector has crossed USD 2,000 per person in most states.

The services sector has become the fastest-growing part of the rural economy, valued at INR 62 trillion in FY25. It grew at 8.8 per cent between FY22 and FY25. Trade, hotels, financial services, real estate, and logistics all saw strong gains. Public administration grew more slowly at 6.9 per cent.

Tamil Nadu and Maharashtra topped the list with nearly 10 per cent growth in rural services. Rajasthan, on the other hand, saw slightly weaker performance. The average income per person in the rural services sector has now gone beyond USD 3,000 in most states.

Agriculture, which contributes INR 61 trillion to the rural economy in FY25, grew slower than other sectors. Overall, it grew at 3.9 per cent between FY22 and FY25. Crops, which make up most of the sector, grew only 2.8 per cent, while livestock did slightly better at 5 per cent, and aquaculture led the way with 7.4 per cent growth. However, these are all slower than earlier years.

Among states, Uttar Pradesh and Maharashtra saw strong agricultural growth at 6 per cent and 5.2 per cent, respectively, while Karnataka saw a slight decline. Despite challenges, the average agriculture income per person stood at USD 1,145 in FY25. (ANI)