GAP iNTERDISCIPLINARITIES A Global Journal of Interdisciplinary Studies ( ISSN – 2581-5628 ) Impact Factor: SJIF - 5.363, IIFS - 4.875 Globally peer-reviewed and open access journal. GAP iNTERDISCIPLINARITIES – Volume - VI Issue III July – September 2023 86 https://www.gapinterdisciplinarities.org/ A THEORETICAL STUDY OF FINANCIAL LITERACY IN INDIA Suhaag D. Maheria Assistant Professor (GES-II) Department of Accountancy, Shri K.K Shastri Government Commerce College, Gujarat University, Ahmedabad, India Abstract Multiple studies have tried to examine the level of financial literacy in India. Most of them conclude that financial literacy in the country is lacking. However, due to India's diverse cultural and socio-economic landscape, forming a unified assessment of its financial literacy level is challenging. Conducting a comprehensive nationwide study on financial literacy and its related aspects could provide a deeper understanding, aiding in the formulation of effective policies. This paper conceptualizes various facets concerning financial literacy, encompassing its origins, definition, financial literacy in India, and the role of India's National Centre for Financial Education and various initiatives taken by NCFE. It also discusses financial literacy in India as compared to its neighbouring countries. When examining the financial literacy of adults in neighbouring countries of India, the study reveals that India surpasses Bangladesh, Nepal, and Afghanistan, but falls behind Bhutan, Myanmar, Sri Lanka, China, and Pakistan. Financial literacy levels vary significantly among the states of India. Goa, Chandigarh, and Delhi are the most financially literate states, while Odisha, Sikkim, and Chhattisgarh are the least financially literate states. Keywords: Financial Literacy, National Centre for Financial Education, Financial Education 1. INTRODUCTION: In recent years, knowing about money and finances has become more critical. This is because financial systems are growing quickly and getting more complicated around the world. The situations in which people make decisions about money have changed, and this change will keep happening due to new and always-changing technology. There are many different kinds of financial products and services available now, and they are being advertised using technology and other ways. But it's difficult for regular people to understand all this information and make good choices. This is why it's essential to have knowledge and skills about money, which can be learned through financial education. Financial literacy plays a crucial role in preventing individuals from making mistakes with their money. Moreover, it proves valuable during emergencies, such as job loss or unexpected expenses, enabling better financial preparedness. 2. OBJECTIVES: 1. To understand the origin and definition of Financial Literacy. 2. To understand the financial literacy of India as compared to neighbouring countries. 3. To summarize initiatives led by NCFE and compare the percentage of financial literacy rates in various states of India. 3. LITERATURE REVIEW: Jyoti Prakash Rath and Samira Patra (2023) from Odisha, India, explored the concept of Financial Literacy, defining it as a blend of awareness, knowledge, skills, attitude, and behavior necessary for sound financial decisions and individual well-being. Their study focuses on India's current economic situation, and financial literacy's importance and highlights diverse financial services, especially from banks and insurance companies. Data is collected from various secondary sources; The authors suggest that financial literacy is an urgent requirement and people need to understand the benefits of financial services provided by Government and Financial Institutions from time to time. Their message is clear: It's not enough to be literate; one must be "Financially Literate." Hridhya P.K. and Dr. R. Jayaprakash Reddy (2020) from Mysore University and AIMS Centre for Advanced Research, respectively, discuss the crucial role of financial literacy in an individual's financial well-being and a country's economic growth. They highlight that a strong financial system contributes to a nation's