ROLE OF FINANCIAL LITERACY IN PROMOTING INCLUSIVE GROWTH AND POVERTY ALLEVIATION

Abstract

Financial literacy is a crucial aspect of keeping the economy stable and helping it expand in a 
manner that will survive in today's world. It implies that individuals know how to save, budget, 
invest, manage credit, and use financial services. In developing countries like India, it's vitally 
crucial to know how to manage money in order to get more people engaged in the formal 
financial system and provide them the tools they need to do so. People who know more about 
their money may make better decisions about it, manage their resources properly, and not let 
others take advantage of them financially. Financial literacy is also good for development that 
includes everyone since it makes sure that everyone, including those with low incomes and 
those who are on the outskirts of society, has the same access to financial possibilities. When 
people know how financial products and services function, they are more likely to utilize banks, 
savings accounts, insurance, and investment options. This helps reduce poverty by making 
individuals more financially stable and less dependent on informal loan sources.  
The present research employs secondary data sourced from papers and publications of the 
Reserve Bank of India, the World Bank, governmental entities, and academic journals. The 
study's findings indicate that enhanced financial literacy increases the likelihood of saving 
money, fosters financial responsibility, and promotes prudent financial decision-making. The 
study shows that improving programs that teach people about money and raise awareness is 
important for promoting inclusive growth and reducing poverty, which in turn supports long
term economic growth. 

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