Rural India outpaces cities in cash usage and consumption: CMS report

INDIA: According to the fourth edition of the CMS Consumption Report released today, the nation’s consumption engine is warming up, powered by a resilient reliance on cash and a structural shift towards formal, value-oriented purchases.

While macro headwinds and GST reforms have shaken the table, households are rebalancing priorities rather than tightening belts. Travel remains the undisputed king of the wallet, gobbling up Rs 37 of every Rs 100 spent. However, a new cautiousness has crept in: insurance has leapfrogged to the second-highest priority at Rs 25, as risk awareness takes root in the national psyche.

The real story, however, lies in the hinterlands. Semi-urban and rural India (SURU) are now outpacing metros in cash usage, with average monthly ATM withdrawals hitting Rs 1.30 crore compared to the Rs 1.18 crore seen in the big smoke. This isn’t just a festive fluke; it is a structural shift. Rural consumption expenditure has grown at 9.2 per cent annually since 2012, faster than the 8.5 per cent seen in urban centres.

Despite the digital surge, the physical shopfront is fighting back. Organised retail chains saw a 22 per cent jump in cash pickups, as 56 per cent of urban shoppers still prefer the tactile thrill of the store. Even as inflation hit a historic low of 0.25 per cent in October 2025, the Indian consumer remains deliberate, trading transient splurges for utility and protection.