A REVIEW OF THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND FINANCIAL MANAGEMENT IN INDIA

This review study delves into the relationship between financial literacy and financial management in India. It is a fact that financial literacy has emerged as a crucial factor in shaping individuals' financial decisions and outcomes globally. The study synthesizes existing literature to analyze how financial literacy levels influence various aspects of financial management, including savings, investment decisions, debt management, and retirement planning, among Indian individuals and households. India, as a developing economy, faces unique challenges and opportunities concerning financial literacy. The review highlights the disparities in financial literacy levels across different demographic groups, regions, and socio-economic backgrounds within the country. It also examines the impact of various initiatives, such as financial education programs and policy interventions, aimed at improving financial literacy among the population.

The review findings suggest that higher levels of financial literacy are associated with better financial management practices, such as increased savings rates, diversified investment portfolios, and more effective debt management strategies. However, significant gaps in financial knowledge persist, particularly among vulnerable and marginalized groups. Moreover, the research review discusses the implications of these findings for policymakers, financial institutions, and educators in India. It underscores the importance of targeted interventions to enhance financial literacy through accessible and culturally relevant educational initiatives. Strengthening financial literacy can not only empower individuals to make informed financial decisions but also contribute to broader economic stability and inclusive growth in India. Therefore, it is evident that while progress has been made in promoting financial literacy in India, more efforts are needed to address existing gaps and inequalities. Continued research and strategic interventions are essential to foster a financially literate population capable of navigating complex financial landscapes and achieving long-term financial well-being.