“As the share of digital payments keeps increasing, cash continues to account for a majority share of consumer expenditure at 60 per cent as of March 2024,” the report said
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Bihar, New Delhi and Uttar Pradesh are India’s top three consumption hotspots in terms of growth in average cash dispensed per ATM, according to the CMS Consumption Report 2025.
The growth in monthly average cash dispensed per ATM in FY25 was the highest for Bihar (8 per cent), followed by New Delhi and Uttar Pradesh (4 per cent each), Himachal Pradesh (3 per cent), Chhattisgarh and West Bengal (2 per cent each), Maharashtra and Odisha (1 per cent).
In FY24, the top consumption hotspots included New Delhi, Uttar Pradesh, and Tamil Nadu.
“Every year, we observe new entrants to the list of top consumption hotspots that displace some of the states from the previous year. A key tailwind for consumption growth in the country is the availability of a robust cash infrastructure.
“Between 2014-2024, several enablers have aligned to propel the cash economy, which, in turn, has been instrumental in the making of a consumption economy,” per the report.
In the period 2014-2024, Currency in Circulation (CIC) increased by 157 per cent, the number of ATMs grew by 32 per cent, and the number of bankamil branches grew by 36 per cent.
Tamil Nadu and Uttarakhand witnessed no growth in monthly average cashdispensed per ATM.
The states/ UTs that witnessed de-growth in monthly average cash dispensed per ATM include Tripura (23 per cent), Mizoram (16 per cent), Kerala (14 per cent), Assam (8 per cent), Gujarat (6 per cent), Rajasthan and Jammu & Kashmir (3 per cent each), Jharkhand, Karnataka, Madhya Pradesh and Punjab (2 per cent each), and Andhra Pradesh and Goa (1 per cent each), the report said.
Preference for currency
The report noted that Ceteris Paribus, a higher currency-to-demand deposits ratio indicates a preference for currency over digital modes.
“As of April 2023, the currency-to-demand deposits ratio was above its long-term average of ~1.61, having recovered from the demonetisation drop to approximately 0.8 and in line with pre-demonetisation levels of approximately 1.7, indicating a preference for currency over digital modes.
“As the share of digital payments keeps increasing, cash continues to account for a majority share of consumer expenditure at 60 per cent as of March 2024,” the report said.
Reverse consumer behaviour
FY25 saw reverse consumer behaviour, going back to the pre-COVID consumption phase with immediate fulfilment, with three retail segments — consumer durables, multi-brand outlets and FMCG — witnessing the highest consumption growth (in terms of average cash-led purchase per retail store), according to the report.
In FY24, the retail segments with the highest spending growth were media & entertainment, FMCG, and consumer durables. The shift in mindset is influencing the consumption habits of the Indian consumer.
“As disposable incomes rise and employment landscapes shift, Indian households increasingly lean toward discretionary spending. CMS data underscores this shift, revealing growth across various sectors as consumers prioritise spending beyond essentials … even as they strike a balance between the experience economy and the goods economy,” the report said.
Published on May 6, 2025
