New Delhi, Dec. 13 -- India's rural economy expanded and recovered strongly in late 2025, with consumption, incomes and investment improving after a key tax reform and as inflation eased, a survey showed. So far this year, 79.2% of rural households have increased their consumption spending-the highest in FY26-up from 76.2% in the previous round, according to the November 2025 NABARD RECSS survey. The share of monthly income spent on consumption has also risen to 67.3%, the highest since the survey began, aided by GST rate rationalization. The survey was conducted after the rationalization of the goods and services tax was announced by the GST Council on 3 September during the festival season and against a backdrop of a sharp moderation in rural inflation and food deflation. The results were mixed during this period for companies benefiting from lower taxation as consumers postponed purchases in anticipation of the revised rates. GST rate cuts that came into effect on 22 September positively impacted categories like television, automobiles, air-conditioners, refrigerators, soaps and biscuits. "Rural consumption demand buoyancy appears to have got a boost after GST rate rationalization, with improved real purchasing power of non-farm income in rural India with softer inflation also contributing to the momentum," the survey said. Large consumer companies such as Nestle, Parle Products and Marico reported similar trends in the September quarter. Several companies continue to double down on the rural markets. Biscuit maker Parle Products witnessed faster growth in Rs.10-20 price packs in the rural markets post GST reduction. In the snacking category, Rs.5-10 packs account for the bulk of the market. "As a result of the reduction in GST, overall consumption has gone up. some of the premium items have seen really good traction. In rural sales, we've seen good traction and growth coming in lower-unit packs of our premium products as well," said Mayank Shah of Parle. This includes Rs.10 and Rs.20 packs of Hide & Seek, Milano and NutriChoice biscuits.It also sells Parle-G biscuits for as low as Rs.2. GST on biscuits was reduced from 18% to 5%. The rise in consumption coincided with rural households perceiving inflation easing to 3.77%, slipping below 4% for the first time since the survey began. Rural markets remain critical for consumer goods companies, accounting for 38% of packaged goods sales and supporting the livelihoods of two-thirds of India's population. Likewise, Nestle India is sharpening its portfolio and distribution to tap more rural consumers, chairman and MD Manish Tiwary said in a recent interview with Mint....