Financial Literacy and Inclusive Growth : Challenges and Opportunities

In India, financial literacy could now be only for the disadvantaged needy / underprivileged / poor but this is a continuous process where all citizens of the country should be periodically educated, which would become a certain tool to pave for the economic growth and the strength of the country. Recently our Prime Minister has announced series of ambitious social security schemes, relating to the pension and insurance sector and intended at widening the process of financial inclusion. The schemes like Jan Suraksha Yojana under the Jan-Dhan Yojana, Atal Pension Yojana (APY), Pradhan Mantri Suraksha Bima Yojana (accident insurance), Pradhan Mantri Jeevan Jyoti Yojana (life insurance), launch of MUDRA Bank will only be successful if the people are clearly aware about the importance of insurance, formal banking transactions, old age pensions etc. These initiatives provide policy push to encourage savings and insurance through PMJDY and social security schemes as well as push credit for businesses through MUDRA. On the other side, RBI's policy push towards setting up of differentiated banks (Small Finance Banks (SFBs) and Payment Banks (PBs)) will provide avenues for creating last mile institutional infrastructure for financial inclusion in the next 15–18 months. While these are tremendous efforts that can have significant outcomes in terms of making financial services accessible to all, especially to low-income households, these outcomes cannot be achieved if potential customers are not aware of the programmes and how to benefit from them. Hence, first and the foremost there is an urgent need to educate the financially excluded sections about these schemes. In this context financial literacy is comes first and financial inclusion later