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Changes the Indian Education System Needs: Why I Believe We Need Financial Literacy And Basic Life Skills In The Current System

The Indian education system is not only praised for its focus on academic excellence but also for rolling out top-tier figures who went on to become CEOs of major companies. However, it lacks some of the basic life skills that Indian students require, not only to become all-round citizens but also to contribute to the economic development of the nation.


One of the main areas the current education system focuses on is memory-based examinations, which prevent students from thinking critically and creatively. Right now, we see students preparing for entrance exams, and most of these exams have MCQ-type objective questions, which means students have to cram a lot of information.


When I was writing entrance exams for my MA, I noticed that almost all questions were based of my memory and not my skills. This type of education does not encourage students to gain the analytical and problem-solving skills required to generate real-world solutions.


Moreover, this type of surface-level learning and memory-based examination is harmful in the long run, as it prevents students from delving deeper into the subject. The current teaching methods also prioritises strict adherence to a rigid syllabus and are limited to the prescribed textbooks only.


While the NEP 2020 embraces technological innovation, it fails to accommodate essential life skills. A major gap we see in the current education system is the lack of financial literacy.


We see the current adult population struggle to manage their finances, often falling into debt traps and not having enough knowledge about how the Indian banking and tax systems work. Personally, I have witnessed a few people suffer at the hands of loan sharks who often invade people’s privacy or harass them on the phone to get EMI payments.


If educating the young generation can help them avoid such scenarios, then I believe it is high time to introduce financial literacy in schools and colleges.


According to the Global Financial Literacy Center, only about 27% of India’s adult population has minimum financial knowledge. The RBI revealed that in 2017, around 56% of Indian households had unsecured debts. Moreover, it revealed that 77% of respondents stopped saving money for their retirement and instead had to rely on their children.


When it comes to disadvantaged communities, the lack of financial literacy is felt deeply. However, this issue is challenging for middle-class and upper-middle-class people as well. Having little or no knowledge about managing personal finances, investing, and saving also poses a threat during emergencies (like when a loved one has a chronic health issue and needs constant health care).


Many fall for these get-rich-soon schemes, credit card scammers, dubious cooperative banks, and lotteries and lose their money. Lack of investment knowledge also hampers individuals from creating wealth and saving more.


Therefore, a lack of financial literacy and education often leads to poor financial decisions and debt accumulation. The absence of financial literacy in schools contributes to the general lack of knowledge about our finances, economy, and the inner workings of our financial sector.


This is reinforced by an educational system that makes it difficult to teach subjects like financial literacy and places a heavy emphasis on traditional academic subjects like science, math, and engineering.


In addition, most of the adult population seems to have no concerns about maintaining social hygiene. We constantly see people littering the roads and defecating openly. Even educated people stop their cars to get down and pee on the side of the roads. However, this issue will be a separate article on its own.


To tackle these problems and to educate people to become better citizens, the Indian education system needs to introduce application-based learning and examination, helping foster creativity, innovation, and problem-solving skills.


It also needs to formalize financial and public health literacy and education. Students also require regular career counselling, where guidance counsellors can help them identify their talents and skills and target appropriate professions.


Application-based education can involve a revision of the entire curriculum to include real-world applications of theoretical concepts, from case studies and individual projects to hands-on activities. Moreover, the curriculum can start introducing interdisciplinary learning, where students will learn through connections made between different subjects.


Furthermore, students can be tested with evaluations that measure their intelligence, creativity, and critical and analytical skills. This might involve problem-solving activities and scenario-based questions. Teachers can create assignments that specifically test the students’ application of knowledge.


The education system can help promote creativity by integrating art and extracurricular activities. Students can learn how to play an instrument, write, paint, dance, sing, and so much more. The curriculum can also encourage project-based learning and support student-driven initiatives.


The current education system needs to embed financial literacy into the curriculum from primary to higher levels of education. Students will become equipped with essential financial knowledge by introducing finance modules and having basic knowledge of investing, saving, debt, insurance, mutual funds, or even the basics of the tax system. We can introduce real-life personal finance scenarios, along with financial case studies, workshops, and seminars, expose them to business reports, and integrate financial books by major finance figures.


We can also introduce online financial courses, where the school or institution will collaborate with online platforms that students from different socio-economic backgrounds may find accessible.


This alone will have a profound impact on the lives of the upcoming citizens and the economic development of the country.


Even Mr. Nithin Kamath of Zerodha, India’s largest brokerage firm, believes in equipping the youth with financial knowledge. He says, “If India has to do well economically, then we need more wealth creation to happen within. For this local wealth creation, more Indians have to take calculated risks, especially the younger lot, and must be financially literate and make better financial decisions when they start earning.”


 


Edited by Shawn Chodhry and Kevin Moonuparayil


Photo Credit: Freepik


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