Financial Literacy: Important for Growth and Inclusion

Abstract

The financial system plays an important role in the growth and development of a nation. The basic function involve is to transfer fund from surplus generating unit to deficient generating unit.  Since economic reforms, India has one of the highest saving rates in the world but allocation of these savings is a cause for concern. Creating financial literacy plays an important role in information, knowledge, skills to evaluate options and enables consumers to understand the implications of alternative financial decisions. Though financial literacy increased in India  but negative symptoms which are observed are underinsurance, debt trap, insufficient retirement fund, low return on investment  and the cause of all these is one and the same  is financial Literacy. This research paper with the help of questionnaire outlines the necessity and importance of financial literacy for the growth and inclusion.