Financial literacy is the ability to understand and use financial skills in budgeting, investing, and in one’s own financial management. The Financial Literacy and Education Commission enlists ‘earn, spend, save and invest, borrow and protect’, as the five main components of financial literacy. Financial education enables an individual to effectively manage his finances and debts, if any. It allows an individual to take decisions about spending, saving and borrowing financial resources, and hence, it is crucial to sustaining, achieving economic independence, and leading a good lifestyle. Financial literacy is in turn important for the development of a society as a whole, as more the financially literate individuals in a state or country, higher is the possibility of its economic growth.
In recent times, the government has taken some important steps towards boosting financial literacy in J&K. Here’s information about some of these initiatives and an insight into the importance of financial education in Jammu and Kashmir.
Initiatives to Boost Financial Literacy in J&K
Last year, the Bombay Stock Exchange (BSE) signed 4 pacts with the Jammu and Kashmir government to spread financial awareness, boost economic development, and promote sustainable living of youngsters. Memorandums of Understanding (MoUs) were signed between BSE and Mission Youth, a J&K government initiative that aims to improve skills and create employment for the youth of Kashmir. According to Lieutenant Governor Manoj Sinha, the joint efforts of the government and BSE are aimed at helping the youth and women to shift from the classroom environment to a workplace. Moreover, apart from spreading financial literacy in Jammu and Kashmir, they are also adopting the best global practices for empowerment of the youth and working toward achieving sustainable livelihood.
According to BSE Managing Director and CEO, Ashish Kumar Chauhan, BSE in collaboration with the J&K government, intends to take up other such projects to encourage women and youngsters to learn about the financial sector and develop the skills required for a career in BSFI (banking, financial services and insurance). The government aims to conduct financial awareness programmes, courses in banking and financial markets, and training programmes in mutual funds.
In December this year, the Reserve Bank of India, Jammu, in collaboration with CRISIL Foundation, Mumbai started the Centre for Financial Literacy (CFL) in Jammu, along with 39 other CFLs across Jammu and Kashmir which were launched virtually. This initiative aims at achieving financial inclusion, encouraging growth, and promoting financial literacy in J&K. The purpose of CFLs is to let people know about financial goods and services, and good financial practices.
After the CFL launch, RBI officials conducted a Financial Literacy awareness session, which was attended by villagers, school students and teachers, and businesspersons. In this session, the officials provided information about banking frauds, e-KYC and digital banking.
In a study conducted by Research Scholar (JRF), Nawaz Ali and Senior Assistant Professor, Dr. Parvez Ahmad Shah, from the Department of Commerce, University of Kashmir, J&K, it was found that people were financially aware to the extent of 60% and lacked information about investment and financial management. It was also found that people have a satisfactory basic financial information and require more training and awareness in the field. Based on the data collected in this study, it was concluded that along with the government, finance experts in J&K should also come forward to impart financial education to the masses.
Importance of Financial Education in Jammu and Kashmir
Taking the right financial decisions at the individual and organizational levels is crucial to the economic development of any state, UT or the nation as a whole. Jammu and Kashmir is no exception. If more people in J&K, especially the youngsters, are financially literate, they will be better at managing their finances and be more equipped to take up careers in the banking and finance sector. If financial resources are effectively managed at the individual and business level, the way for economic growth of J&K will be paved faster.
In Jammu and Kashmir, the trend of entrepreneurship has been rising for the last few years. Many youngsters have started venturing into offbeat fields and several among them dream to be self-starters rather than taking up jobs. Many young men and women in Kashmir have established their own businesses during the lockdown and they wish to expand their ventures in the future. Financial education will enable these budding entrepreneurs to achieve growth in business, and in turn help the economy of J&K.
If women in Jammu and Kashmir are given financial education, they will be empowered to take financial decisions for their households and impart their knowledge to their children. This, in turn, will help the next generation be more financially aware. Some women may start careers in finance and some may turn to entrepreneurship. Financial literacy will provide them the confidence to venture into different fields and make a career for themselves.
Jammu and Kashmir is highly conducive for business sectors such as agriculture, horticulture, handicraft, and tourism. Those running businesses in these sectors should be financially literate in order to promote these sectors better and achieve economic growth. Knowledge about finances will enable them to take good decisions for their business, which in turn would boost development in J&K.
Financial management is the backbone of any business and it is also important for a better living. Thus, boosting financial literacy is of utmost importance in order to achieve economic development. The importance of financial education in Jammu and Kashmir cannot be stressed enough. Efforts in promoting financial literacy, which are being taken by government and finance experts, are surely leading J&K towards a brighter future.
