BAJAJ BROKING

Notification
No new Notification messages
Dr Agarwal's Health Care IPO is Open!
Apply for the Dr Agarwal's Health Care IPO through UPI in just minutes.
Q3 FY'25 Results of Top Companies!
From Reliance Industries to TCS to HDFC Bank, check out the latest quarterly results with financial highlights, key performance metrics, and more!
Open a Free Demat Account
Pay ZERO maintenance charges for the first year, get free stock picks daily, and more.
Trade Now, Pay Later with up to 4x
Never miss a good trading opportunity due to low funds with our MTF feature.
Track Market Movers Instantly
Stay updated with real-time data. Get insights at your fingertips.

Union Budget 2025: What to Expect for Financial Literacy?

Synopsis:

While the Indian economy has grown considerably in the last few decades, financial literacy is one area that needs a lot of improvement. A significant number of people, especially in small towns and villages, are not aware of financial products, like shares and debentures. Besides, not everyone knows how to plan, save, budget, and invest for retirement. Many members of the young workforce are not equipped enough to work in the finance sector. To deal with these challenges, stakeholders expect the Union Budget 2025 to announce several measures because if India wants to become a developed country, its people have to become financially literate.


India faces many hurdles when it comes to financial literacy, which poses a number of societal and economic challenges. For example, a vast number of people in small towns and villages do not understand basic financial products, like shares, bonds, and debentures. As a result, they cannot invest in such products. Besides, a lot of youngsters in such places are not equipped enough to work in the finance sector.

Lack of sufficient knowledge about financial products also prevents a lot of people from planning for their retirement. As life expectancy is increasing in India and a significant number of people are living well beyond their 80s, it is important to plan for a long-retired life.

The Central Government has taken several initiatives through its earlier budgets to promote the cause of financial literacy. Hence, even in the Union Budget 2025, the industry expects Finance Minister Nirmala Sitharaman to continue placing emphasis on financial literacy through a variety of measures.

Introduction

  • Why Financial Literacy is a Key Focus Area?

    There are two reasons why financial literacy is a key focus area in the upcoming Union Budget 2025. First, without financial literacy, people cannot secure themselves financially for their lifetime. Second, without adequate financial literacy and skills, people cannot be employed in the financial sector. Based on a report published in Firstpost, a Securities and Exchange Board of India’s (SEBI) study revealed worrying insights, as it said that only 27% of India’s population is financially literate.

  • Role of Union Budget in Shaping Financial Literacy

    The Union Budget 2025 can give a boost to financial literacy in India through a number of policy initiatives. For example, it can announce programs that will improve financial literacy in Tier 2 and 3 cities. In such smaller cities, people tend to be less financially literate than their counterparts in Tier 1 cities. In the past, the Union Budgets have placed emphasis on financial inclusion. Continuing that tradition, the Union Budget 2025 could announce broader measures that can help people gain skills regarding budgeting, saving, and navigating the formal financial system.

Key Pre-Budget Expectations for Financial Literacy

  • Expected Budget Allocations[1]

  • Policy Updates Likely to Impact Financial Literacy

    A number of key policy announcements are expected in the Union Budget 2025 to promote the cause of financial literacy. According to a report published in The Economic Times, the industry expects the government to revamp the landscape of financial education in India through edu-fintech partnerships. The report further stated that stakeholders expect Ms. Sitharaman to boost digital financial literacy by announcing tax incentives for those platforms that provide financial education and programs for skill development. As per a report published on the portal of CNBC TV18, industry experts also think that the government should announce measures to promote the creation of financial products for the post-retirement financial security of older people. In addition, the report said that policy measures should educate people that insurance is not just to save tax; instead, it is important for the overall financial safety of a family.

Trends from Previous Budgets and Their Influence on 2025

The Central Government has been working hard to promote financial literacy for a while now. For example, while presenting the Union Budget 2023-24, Ms. Sitharaman urged financial sector regulators and organisations to provide age-appropriate reading material to improve the financial literacy of children and adolescents. The Budget 2023 also announced initiatives to promote collaboration with non-governmental organisations (NGOs) to give a boost to financial literacy. Going back further, in Budget 2022, Ms. Sitharaman announced that 75 digital banking units (DBUs) would be set up in India with the objective of spreading digital financial literacy by focusing on customer education on cybersecurity awareness. Based on the earlier budgets, it is expected that the government will continue its focus on digital financial literacy in the Union Budget 2025 as well.

Challenges to Address in Budget 2025

  • Existing Issues in Financial Literacy

    When it comes to financial literacy, the major challenge is the wide gulf between Tier-1 cities and smaller towns. In Tier-1 cities, a much higher number of people are aware of several kinds of financial products, like shares, bonds, bank accounts, debentures, etc. However, in Tier-2 and Tier-3 cities, a significantly lesser number of people are aware of all financial products. Besides, only a few people in smaller towns have access to the formal system of finance, which makes them turn to unorganised sources of finance, which charge exorbitant interest rates.

  • Industry Expectations to Overcome Hurdles

    The government is expected to take measures to bridge the divide between metro cities and small towns with regard to financial literacy. Then, there is another pressing challenge, as a number of young people in India’s workforce are not equipped enough to work in the financial industry. To deal with it, an Economic Times report said that stakeholders expect the budget to announce policy initiatives to encourage collaboration between industry and academia so that the workforce can become financially more literate and is adequately equipped with skills in banking, fintech, and investment management. Further, a CNBC TV 18 report said that industry leaders want the government to make financial literacy a national priority to achieve the aim of “Viksit Bharat” by 2047.

Do you have a trading account app or demat account app?

You can open an account with Bajaj Broking in minutes.

Download the Bajaj Broking app now from Play Store or App Store.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

Share this article: 

Frequently Asked Questions

What are the top expectations for Financial Literacy in Budget 2025?

Answer Field

The stakeholders expect the Budget 2025 to revamp the landscape of financial education through edu-fintech partnerships. They also expect the government to support digital financial literacy by providing tax incentives for platforms that provide financial education.

How can the Budget benefit Financial Literacy?

Answer Field

Budget 2025 can announce measures to make people in Tier 2 & 3 cities more aware of financial products so that they can invest better. It can also announce programs to make youth better skilled to become employable in banking, fintech, and investment management sectors.

No Result Found

Read More Blogs

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading

Bajaj Broking App Download

8 Lacs+ Users

icon-with-text

4.4+ App Rating

icon-with-text

4 Languages

icon-with-text

₹5300+ Cr MTF Book

icon-with-text