Vehicle insurance, pension coverage up in India’s rural households

New Delhi, Oct 10 : As financial inclusion improves amid rising rural consumption, the percentage of rural households with at least one member covered by any form of insurance increased significantly from 25.5 per cent in 2016-17 to 80.3 per cent in 2021-22, a government survey revealed on Thursday.

It means that four out of every five households had at least one insured member, according to NABARD’s ‘All India Rural Financial Inclusion Survey’ (NAFIS) for 2021-22.

Agricultural households outperformed their non-agricultural counterparts by a margin of roughly 13 percentage points.

Among different types of insurance, vehicle insurance was the most prevalent, with 55 per cent of households covered. Life insurance coverage extended to 24 per cent of households, with agricultural households showing slightly higher penetration (26 per cent) compared to non-agricultural ones (20 per cent).

The survey further stated that the percentage of households with at least one member covered by any form of insurance increased significantly from 25.5 per cent in 2016-17 to 80.3 per cent in 2021-22. Moreover, the percentage of households with at least one member receiving any form of pension (such as old age, family, retirement, or disability) increased from 18.9 per cent in 2016-17 to 23.5 per cent in 2021-22.

Overall, 54 per cent of households with at least one member over 60 years old reported receiving it, highlighting the importance of pensions in supporting elderly members of society, the survey noted.

The percentage of respondents demonstrating good financial literacy increased by 17 percentage points, rising from 33.9 per cent in 2016-17 to 51.3 per cent in 2021-22.

As per the survey, "the proportion of individuals exhibiting sound financial behaviour - such as managing money effectively, making informed financial decisions, tracking expenses, and paying bills on time — also increased from 56.4 per cent to 72.8 per cent during the same period", the findings showed.

The survey results highlight the remarkable strides made in rural financial inclusion since the last survey in 2016-17. Rural households have experienced notable improvements in income, savings, insurance coverage, and financial literacy. The government's welfare schemes like Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Kisan MaanDhan Yojana, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Awas Yojana-Gramin (PMAY-G), Pradhan Mantri Gram Sadak Yojana (PMGSY), Deendayal Antyodaya Yojana- National Rural Livelihoods Mission (DAY NRLM), Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) have significantly contributed to improving the lives of the rural population.