BackITIs, CSCs to be used to spread financial literacy
Short courses to be offered that inform students about various options to access credit
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New Delhi: The government is looking at innovative ways to steer its financial literacy drive to ensure the success of its financial inclusion initiatives. To this end, it is looking to leverage the existing infrastructure of Industrial Training Institutes (ITIs) and Common Services Centres (CSCs) to make people more aware of the various government schemes related to easy access to credit and opening bank accounts.
These institutions will offer short courses on financial literacy that inform students about various options to access credit.
Over the past one-and-a-half years, the government has announced a number of schemes to provide social security to Indians.
It launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) in August last year aimed at providing a bank account to every Indian household. In the next phase, it launched Jan Suraksha, aimed at providing life insurance, accident insurance and pension coverage to all.
It has also launched the Mudra scheme to ensure funding to small entrepreneurs.
Now the challenge for the government is to ensure that the people for whom these schemes are meant know about them and benefit from them. Hence, imparting financial literacy will be key to the success of the financial inclusion initiatives.
More than 19 crore bank accounts have been opened under PMJDY. While more than 9 crore people have enrolled under the accident insurance scheme, almost 3 crore people have opted for the life insurance scheme.
Also, more than ₹ 42,000 crore in loans has been disbursed under the Mudra yojana to around 66 lakh customers.
“The department of information technology manages more than one lakh CSCs. These centres run digital literacy programmes of say 20 hours, 40 hours and 80 hours which the government subsidizes. In these programmes, we have included 90 minutes of financial literacy classes. So along with digital literacy certificates, people will also get financial literacy certificates," said a finance ministry official on the condition of anonymity.
“There is also a lot of focus on Skilling India. But when these students pass out of ITIs, most of them will be self-employed. So it is important that they know about the Mudra scheme as well as the overdraft scheme available under the PMJDY which they can use for their working capital requirements," the official said.
There are more than 11,000 ITIs in the country which see more than 1.5 million students graduating every year.
The official added that the finance ministry will look to either train the teachers teaching in these ITIs or will use bankers to take classes in these institutes and is in talks with the ministry of skill development on this.
S.L. Rao, a Bengaluru-based economist and former director general of National Council of Applied Economic Research, said the use of ITIs is an excellent idea.
“Everyone who goes to an ITI needs to have some knowledge of finance to do basic functions like arranging funds and book-keeping. But the challenge is that most of these institutes are facing a faculty shortage. Using bankers to take these classes may not be very feasible given that they already have a full-time job."
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