“Changing Trend and Pattern of Financial Literacy in India: An Overview about Pradhan Mantri Jan Dhan Yojana”

Abstract

Financial literacy plays an important role in the socio-economic development of a country. Financial
literacy is the ability to use skills and knowledge to take effective and informed money management
decisions. Financial literacy is indispensible for a country like India because it is considered an
important adjunct in promotion of financial inclusion and ultimately financial stability. Financial
illiteracy is a curse in economic development of a nation because it puts a burden on a country in the
form of higher cost of financial security and lesser prosperity. Financial inclusion and financial stability
are the two key aspects of a growing economy and both can achieve through the wide spread of financial
literacy.
Todays changing and developing scenario has made financial literacy much more indispensible. A
person can gain maximum return if he knows better how to put his hard earn money. Financial literacy
enhances ability of individuals to ensure economic security for their families. In India, on one hand, there
is a need of making attempts to access out to lower income groups and economically weaker sections and
on the other, to millimials who are hyper connected and require tailor made financial products, but have
less awareness of the possible financial solutions. Financial regulators in India such as RBI, SEBI,
IRDA, PFRDA and the government of India have taken several initiative steps to spread financial
education and awareness. Pradhan Mantri Jan Dhan Yojana is a step out of them, which was launched in
August 2014 under the direct supervision of the Indian prime minister and ministry of finance. Under this
scheme no balance account can be opened by individuals. The government of India launched this scheme
to provide financial services and products to individuals, who do not have access to a bank account. The
present study is an attempt to examine the success, access and usage of account opened under Pradhan
Mantri Jan Dhan Yojana (PMJDY). Present paper also tried to measure the effectiveness of PMJDY to
spread the financial awareness and education and to promote the financial inclusion. The paper is
divided in several sections and parts. The first part discusses the overview of financial literacy, its
conceptual framework in India and its important in India. The second part analyzes the review of past
literature on the theme and third one describes the main objective of study. Further one discusses the
steps and initiatives which have been taken in India to spread the financial literacy and next section is an
overview of Pradhan Mantri Jan Dhan Yojana. Further sections reflect the research methodology. Data
analysis, finding of the study and last section discusses the conclusion of the study.