For a lofty, beautiful penthouse, a sound foundation for the building is a must. Stronger the foundation, the better it is. That is what seems to be intended by the Karnataka government while planning to introduce financial literacy in secondary and senior secondary classes in the state’s 956 public schools from the academic year 2026-27.
Although late in coming, it is a welcome step – mainly in the background of poor financial knowledge among the Indian population, a sizable section of which struggles with debts and debt-traps. According to an estimate, India faces a financial literacy gap with only 27% of Indian adults being financially literate – far below the average of 52% in advanced economies. Besides, many among the country’s Gen Z are growing up lacking in skills required for financial management and security.
As per the circular issued by the education department, the programme will see bank officials, financial advisers and faculty members from commerce and management colleges conducting sessions with the students on savings, digital payments, responsible borrowing, insurance and the fundamentals of taxation.
The students will be taught the basics in banking, savings, investments and stock markets while not only aiming to promote financial planning and money management among students, but also making them aware and alert about cyber frauds and how to keep their money safe in the future.
This would be a fine avenue to improve the next generation’s financial outcomes by starting early and adopting financial literacy as a life skill instead of struggling to learn the ropes while already manoeuvring through careers in their adult lives.
Most importantly, imparting financial literacy through practical models to students would allow them to understand the value of money and the monetary mechanisms. Hence, although the Karnataka government plans initiating this in the secondary and senior secondary levels of school education, it would be even better to introduce the basics at the primary school level itself.
It would provide additional years of gradual learning, providing better absorption of the essence of financial and investment planning among the students as they grow into adulthood. Many among them could also look at making substantial earnings either as a prime source of income or a secondary one alongside their main careers in future.
This can be done through interesting hands-on workshops that entertain children while educating them about concepts like savings, expenditure, earnings, investments and stock market trading – basically, the entire gamut of financial management and security as they progress to higher classes, and be ready to step out into the world.
This would be a more credible plan – to begin earlier than planned – in meeting the goal of financial inclusion while removing the barriers that exclude marginalized sections from the formal economic system.
There is an advantage in starting financial education in primary schools. While Gen Y (Millennials, born between 1981 and 1996) grew up alongside the rise of the internet and digital technology, Gen Z (born between 1997 and 2012) grew up as digital natives with smartphones and social media.
But it will be Gen Alpha (born between 2013 and 2025) – the first eneration raised entirely immersed in AI, smart devices and touch screens, and a majority of them studying in primary schools – that will benefit from learning the basics of financial education as part of their curriculum.
We have been unfortunate not to have had a robust financial education in schools so far, which explains the financial literacy deficit and the smaller section of people active in financial management, stock trading and investment planning.
Providing financial literacy right from early school years in the basic forms through edutainment rather than a marks-oriented subject, therefore, would make better sense for Gen Alpha – comprising 23% of the country’s population – to benefit from when they step into adulthood.
This is already being tried out elsewhere with positive feedback from the children and their parents. “Project Nivesh”, a grassroots financial literacy initiative run by the Global Shapers Gurugram Hub – a community of changemakers driving impact in Gurugram – has already brought financial literacy into primary schools.
The project teaches basic budgeting that involves managing pocket money while focusing on needs, wants, and savings; the value of saving that teaches foundational saving habits early through a storybook Mary and the Secret of Savings; and financial awareness to encourage practical financial discussions and decision-making skills at a young age.
The state government needs to keep in mind that the seeds for an early, but robust, harvest need to be sown earlier. This would help the youngsters of today make it big sooner than what their Baby Boomers and Gen X counterparts did back in their time – and on a much wider scale, ultimately helping in financial inclusion, too.