Cash Still Dominates North India's Economy Despite Digital Push
Cash remains the dominant form of transaction in North India, nearly a decade after the demonetization drive aimed to promote a cashless economy. According to the CMS Consumption Report 2025, the average cash dispensed per ATM in the region stands at Rs 1.3 crore.
The report highlights that five states in North India are leading the way in cash-led consumption, with Bihar topping the list at 8%, followed closely by New Delhi at 4%, Uttar Pradesh at 4%, Himachal Pradesh at 3%, and Chhattisgarh at 2%.
Over the past ten years, the Currency in Circulation (CIC) has seen a significant increase of 157%, while the number of ATMs and bank branches has grown by 32% and 36%, respectively.
Consumer Spending Trends
The report also notes that the average monthly spending in the consumer durables sector surged by 72% in FY 25, driven by the rise of home ownership and the preference for furnishing new residences.
Similarly, the spending in multi-brand outlets grew by 12% in FY 25, after a decline of -29% in the previous fiscal, boosted by an increase in the purchase of premium products.
Furthermore, the FMCG sector witnessed a 4% increase in consumption in FY 25, compared to a -22% slump in FY 23.
Evolution of a Balanced Economy
According to Anush Raghavan, President-CMS Info Systems, the current trend indicates the evolution of a balanced, formal economy where cash and digital transactions coexist seamlessly to serve different needs.
As the report highlights, the consumer's preference for cash is driven by the need for smaller transactions, which are often not feasible through digital means.
While the digital economy has its advantages, it is clear that cash remains an essential component of the Indian economy, particularly in North India.
The CMS Consumption Report 2025 provides valuable insights into the consumer spending trends and the evolution of the Indian economy, highlighting the need for a balanced approach that incorporates both cash and digital transactions.
