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Rural economy, agriculture sector gain resilience over years: RBI

06 Aug 2026 Evaluate

Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that the rural economy and the agriculture sector have become more resilient over the years, supported by the growth of allied activities, expanded irrigation, greater farm mechanisation, and improved crop varieties. These developments have reduced the impact of rainfall deficiencies on agricultural output. He added that allied activities have also helped rural households cushion income losses during periods of agricultural stress.

RBI Deputy Governor Poonam Gupta has said that data from the past 15 years show the resilience of the rural economy has strengthened in multiple ways. She said 'We have seen that the overall economy has become very resilient, and that resilience extends to different sectors, particularly the agriculture sector and the rural economy'.

Gupta noted that agriculture and allied sectors have increasingly complemented each other, while the expansion of irrigated land has made agriculture less vulnerable to rainfall deficiencies. She said 'If you look at some of the measures by the government, the share of area that is irrigated now is much larger, and it's a secular increase, which means that although rainfall deficiencies and weather vagaries still matter, they matter less than they did in the past'. She added that greater access to farm credit, increased mechanisation, and improvements in crop and seed varieties have further strengthened the sector. She noted that 'Taken together, all of these measures point to a healthy rural economy and a highly resilient agriculture sector'.


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