Financial Literacy of the Indian Young Adults: An Empirical Analysis

Financial literacy levels in India are on the lower side in spite of numerous efforts made by the Governmental and private institutions. 27% of Indians are financially literate as per the reports of National Centre for Financial Education (2019). India is at the 73rd position out of 144 countries in terms of financial literacy. Instilling the essentials of financial literacy in our youth starting from high school level is essential for the future of the nation. They begin making real world financial decisions as to prudently manage their finances and even engage in investments. With relevant financial literacy, the youth can embark on entrepreneurial activities from an early age. It is imperative that the youth learn to preserve and grow their money from an early age to ensure long term sustainable financial well-being. This paper conducts a pan India survey to determine the financial knowledge, financial attitude and financial behavior scores of the youth in the age group of 16-25 years utilizing a structured OECD International Network on Financial Education (INFE) questionnaire. The survey revealed the low level of financial knowledge among the youth on a pan India basis. This paper also establishes via regression analysis how both financial knowledge and attitude significantly affects one’s financial behavior in a positive manner. It is propounded that if policy makers want to ensure sound financial behavior for the prosperous future of India, efforts should be directed towards inculcating the essentials of financial knowledge and attitude in our youth irrespective of one’s choice of discipline of study at graduation and higher levels.