Consumers prioritise buying insurance

Rising risk awareness and protection-led spending have seen insurance emerge as one of the biggest priorities for Indian households. Of the Rs 100 withdrawn from ATMs, Rs 25 in 2025 was spent on insurance purchases, according to a CMS Consumption Report.

On a year-on-year (Y-o-Y) basis, insurance spending jumped 32%, fuelled by GST reforms. In 2024, households spent Rs 19 on purchasing insurance, compared to Rs 17 in 2023.

Interestingly, travel and insurance together account for more than 60% (Rs 62) of discretionary spending by Indian households, compressing the wallet share available for other categories. Travel alone accounted for Rs 37 of every Rs 100 withdrawn—still the largest discretionary outlay, though lower than Rs 50 in 2023 and Rs 42 in 2024.

Within travel, railways fell by 20%, followed by a decline in retail fuel (13%) and aviation (10%).

Another emerging trend was the moderation in e-commerce spending as consumers shifted to offline purchases, alongside a decline in traditional media and entertainment outlays as OTT platforms dominated viewing habits.

Media and entertainment spend fell to Rs 4, marking a 15% decline, while e-commerce saw a 20% fall, dropping to Rs 3, as Q-commerce absorbed essentials demand and offline formats regained traction in non-metro regions.

Retail and Essentials Stable

Meanwhile, spending on essentials and upgrades remained stable. FMCG spends rose to Rs 10, up from Rs 9 in 2024 and Rs 8 in 2023, while consumer durables stood at Rs 8, showing continuity rather than acceleration.

Organised retail chains captured Rs 6 of the wallet share of Indian households, a jump of 22% supported by GST-led rationalisation and steady footfalls, particularly outside metros where offline shopping remains dominant.

Interestingly, education slipped slightly to Rs 5, while hospitality and telecom remained marginal at Rs 1 each, highlighting restrained discretionary choices beyond core needs.

The study revealed that the national monthly average cash dispensed per ATM in CY2025 stood at Rs 1.21 crore, rising to Rs 1.30 crore in November 2025, supported by the festive season. In CY2025, average monthly cash dispensed bottomed out at Rs 1.12 crore in June, marking the lowest point of the year.

Festive Recovery Drivers

This decline coincided with the post–financial year reset, when discretionary spending moderated, liquidity tightened, and consumer outflows paused after year-end expenditures. The softness persisted through the monsoon months (June–September 2025), with cash dispensed averaging Rs 1.13 crore.

However, from September onwards, cash usage began to recover, accelerating sharply into October 2025, when average monthly cash dispensed peaked at Rs 1.26 crore, reflecting a 12% increase from the June low.

This surge was driven by a confluence of factors such as festive season demand, higher retail and services consumption, improved liquidity circulation, and the early impact of GST 2.0-led compliance and transaction normalisation.

Meanwhile, southern and eastern states such as Karnataka, Tamil Nadu, West Bengal, and Odisha recorded higher throughput, while Jammu & Kashmir and Kerala reflected lower averages.

Cash usage was particularly pronounced in semi-urban and rural regions, where average dispensing reached Rs 1.30 crore, compared to Rs 1.11 crore in urban areas and Rs 1.18 crore in metros.

Withdrawals also rose, with average ticket sizes increasing to Rs 5,835 in CY2025, up 4.5% from Rs 5,586 in CY2024. In 2023, it stood at Rs 5,471.