India Must Move Beyond Financial Inclusion to Financial Maturity, Says FMI Study A comprehensive study released by the Indian Institute of Management Udaipur (IIMU) and People Research on India's Consumer Economy (PRICE) highlights significant gaps in household financial capability, resilience, and decision-making across India. Titled the Financial Maturity Index (FMI), the report, based on fieldwork in Gujarat and Rajasthan, introduces a multidimensional framework to assess how households engage with financial systems beyond mere access to services. The findings underscore that while financial inclusion has expanded, informed financial behavior remains uneven, with many households making suboptimal decisions due to limited understanding of key concepts like compounding, inflation, and risk-return trade-offs. The study reveals that financial participation does not automatically translate into sound financial practices. Households often rely on informal advice and exhibit a short-term orientation, with minimal retirement planning and low engagement in diversified financial instruments. Even among insured households, a lack of understanding of policy terms reduces the effectiveness of insurance as a risk management tool. Financial resilience is also limited, as most households lack emergency savings and depend on informal coping mechanisms during crises. Digital financial adoption, though widespread, remains transactional rather than integrated into broader financial planning or asset-building activities. The report identifies a dual pattern in investment behavior. A majority of households remain conservative, favoring traditional instruments like bank deposits, gold, and real estate, while a smaller segment participates in equity markets, often with a short-term focus.#price #india #monetary_policy_committee #financial_maturity_index #iim_udaipur
