There’s a common notion regarding the developing countries like India that, ‘the Rich get richer, the Poor get poorer’. One can recall the famous Bible verse, “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath.” This when translated into economical aspects, the only way out is breaking free of the vicious financial cycle that can be achieved by educating majority population and increasing the financial literacy of the country. The recent measures taken by the Government and the four financial sector regulators (RBI, SEBI, IRDAI & PFRDA) to strengthen financial inclusion in the country have started yielding results. PM Jan Dhan Yojana, Jeevan Jyoti Beema scheme, Atal pension Yojana, launch e-RUPI digital payments, recent launch of RBI’s digital currency, etc. are some such initiatives.
The ‘National Strategy for Financial Education 2020-2025’ (NSFE), released by the RBI, had emphasised on a multi-stakeholder-led approach for creating a financially aware and empowered India. Under this, some of the strategic objectives that have been stressed upon include encouraging participation in financial markets, developing credit discipline, developing a savings and insurance-oriented mindset, improving usage of digital financial services in a safe and secure manner, understanding of basic financial flows and investment, and a lot more. The document even stresses on creating financial literacy content for school children, teachers, youth, women, new entrants at workplace/entrepreneurs, senior citizens, divyanjans, and even illiterate folks.
The launch of National Centre for Financial Education (NCFE) promoted by RBI, IRDAI, SEBI & PFRDA, is also playing a big role in promoting Financial Education across India through various programs, courses, Credit Counselling, and thorugh means of its Financial Literacy Centres being set up by leading banks. As at the end of December 2020, there were 1,478 Financial Literacy Centres (FLCs) in the country. While 1,48,444 financial literacy activities were undertaken during 2019-20 (April-March), a total of 45,588 financial literacy activities were conducted by the FLCs during the period April-December 2020.
Demonetisation, urbanisation, reign of smartphones, Digital India campaign, followed by Pandemic-induced dire circumstances have strengthened digital banking infrastructure in the country. People, through their digital engagements, got acquainted with first the platforms, then their features, then to the practice of making digital payments to continue to (or even expand) avail the utilities. The Digital payments in the country have also been on a surge. Unified Payments Interface (UPI) logged 4.52 billion transactions, amounting to Rs 8.26 trillion in February 2022, according to data released by NPCI. The number of Debit and credit card issued also went up from 88.29 crore in January 2018 to 101.1 crore in January 2022.The number of ATMs across the country has risen to 2.13 lakh in September 2021, over 47% of which were in rural and semi-urban areas. The number of branches of Regional rural banks have also grown exponentially. A total of 22,042 rural bank branches were operating across the country in 2021 (from 17901 in 2014). Other recent glam factors that have contributed in the growth are fintech entrepreneurship, popularity of new terms and technologies like Unicorns, Cryptocurrency, digital kiosks, digital wallets, popularity of social media shops, e-commerce social and networking sites, informal investment platforms, NEFT, IMPS, Net Banking and QR codes etc.
Financial literacy supports the pursuit of financial inclusion by empowering the customers to make informed choices leading to their financial well-being. Financial abilities can pave way for unprecedented economic growth and increase the standard of living. India’s work force combined with strong financial literacy can make it a financially savvy country resonating strong global influence. The dream of making India financially educated is an uphill task for a country whose one-fourth population is not even literate. However, these recent interventions and strategies have resulted in positive changes and these should intensify.
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