Impact of Financial Literacy on Financial Inclusion and Economic Growth of India

Abstract

Financial literacy and financial inclusion are essential drivers of sustainable economic growth, poverty alleviation, and social empowerment. This research delves into the nexus of these aspects, focusing on how the resource allocation of financially literate and included individuals is more efficient towards education, Health, and entrepreneurship, thus leading to increased incomes and productivity. It further elucidates how inclusive financial systems ensure equitable income redistribution, macroeconomic stability, and social cohesion, while promoting small and medium enterprises through affordable financial products and services.The research pursues five key objectives: (i) to analyze differences in financial literacy across demographic groups through surveys, interviews, and focus discussions; (ii) to investigate how financial literacy shapes access to and use of financial services such as savings, credit, pensions, and insurance; (iii) to assess the macroeconomic impact of financial inclusion on growth, employment, poverty alleviation, and digital economy expansion; (iv) to evaluate the roles of government, financial institutions, and NGOs  (v) to identify barriers—structural, educational, psychological, and socio-cultural—that hinder inclusion.Results will inform policymakers, educators, and institutions to shape focused interventions that close knowledge gaps, improve access to finance, and create inclusive, resilient, and sustainable economies.