Union finance minister P Chidambaram said today that educational institutions across the country should make financial literacy a compulsory subject for students of all streams in classes XI and XII. Delivering a lecture at the Rajiv Gandhi Centre for Contemporary Studies, University of Mumbai, he said, “Financial literacy needs to be embedded in our way of life. Everyone who earns an income is a potential saver, every saver is a potential investor, every investor ought to be financially literate.”

“Inclusive growth, which is our objective, requires the participation of everyone, rich or poor, in the growth process and sharing the growing prosperity,” Chidambaram added. With India’s growth increasingly becoming investment driven, it is important to make potential savers and investors “financial literates” so that more people can contribute to the country’s economic growth, the finance minister said.

He explained that financial literacy is the ability to make informed judgements and take effective action on the current and future use of money and the ability to manage money. It is these skills that will enable an individual to save, borrow, invest and manage financial affairs prudently, he noted, pointing out that several developed nations are making efforts to promote financial literacy.

The finance minister observed that the process of inclusive growth will be strengthened if more individuals participate in financial markets. The spread of financial literacy will increase such participation and influence investment decisions, he added.

For financial literacy to have a significant impact, its spread should begin right from Classes XI and XII and the media should devote space and time for it, Chidambaram said. He made it clear that the objective of the course would not be to make financial pandits but to make people financially literate — to help investors and help in the nation’s growth.

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