A financial fitness platform has ranked the states of India according to a financial literacy index. Six states have high literacy rates while eight states have been assigned a low score.
From insurance to retirement planning, tax planning to investment decisions, the survey found the average Indian scoring low on different areas of personal finance. (Picture Credit: Freepik)
Increasing financial literacy is not only a priority area for the government but also a necessity for better living for the individual. However, Finnovate, a financial fitness platform, has recently conducted a survey that reveals there are only half a dozen states that have high financial literacy.
High scoring states
These states are Kerala, Pondicherry, Delhi, Chandigarh, Goa and Himachal Pradesh. They have been assigned a score of equal to or greater than 0.53 out of 1.
The backbenchers
The survey found Arunachal Pradesh, Assam, Bihar, Jharkhand, Manipur, Meghalaya, Nagaland, Uttar Pradesh with low financial literacy (equal to or less than 0.33).
The middle batch
The rest of the states – Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Mizoram, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttarakhand, West Bengal – were assigned scores between 0.34 and 0.53 and described as those with medium literacy.
Retirement planning neglected
The survey identified significant gaps in financial planning at the level of individuals.
It reported that as many as 65% did not save/invest enough for retirement.
About 40% of respondents didn’t have enough emergency fund.
Senior citizens burdened with EMI
A mere 38% were free from debt. Worse, 31% of the senior citizens were paying EMIs. And 27% haven’t planned their taxes effectively.
Equities were found to be the flavour of the season with 81% investing in it, but 53% invest less than 30% of their savings in equity.
As much as 73% of those surveyed were uninsured/underinsured for healthcare, while 74% had poor life insurance coverage.
Youth score the lowest
Of the senior citizens 29% were unaware of their current net worth.
The youth (18-30 years) were least aware with financial fitness scores the lowest among age groups.
Of those between 30 and 45, 58% are investing less than 30% of their income.
The survey said members of the 45-60 age group, too, had inadequate savings.
Sample size
The survey interacted with 1,727 individuals in the age groups of 18-30 years, 30-45 years, 45-60 years and senior citizens. The topics selected for discussion were financial goal planning, budgeting and taxation, loans, insurance, investment decisions and estate planning.
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