Srinivas needs financial planning but who’s going to give it to him?

When finance minister P Chidambaram on July 20 said that financial literacy should be a compulsory subject in class XI, and observed...

When finance minister P Chidambaram on July 20 said that financial literacy should be a compulsory subject in class XI, and observed, “Everyone who earns an income is a potential saver, every saver is a potential investor, every investor ought to be financially literate,” and stressed on inclusive growth, I travelled back 30 days on a journey to my hometown.

I had to make a sudden trip to Gorakhpur and after trying in vain to get a berth on a train, I spent the night awake in a general compartment. I sat on the entrance footstep of the wagon, sharing it with a rough looking man, rough clothes, rough hands, but warm, soft eyes.

We got talking and he introduced himself as Srinivas, a 29-year-old knowledge worker — a mason, an “expert” in fixing marble slabs. As he smoked his beedi, he told me he had no savings, even though he made between Rs 12,000 and Rs 15,000 a month and had been working for the past seven years. He does not have an insurance policy and has three children and a spouse to be looked after.

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We write about microfinance, micro SIPs and so on but we also know that our banking system has failed to reach half of our country’s population. I wonder how going micro will help.

Does Srinivas need financial planning? He not merely needs it; financial planning for him will be a life-changing tool. When asked why had he not opened a bank account or a post office saving, he very meekly said, “No one ever advised me where to keep the money and so I just save in cash which then gets used later on.” I realised that this man will keep earning till the end of his life and will have no savings that can take care of his children’s education, their marriage and his retirement.

I scared him with all these thoughts and also with the idea of what would happen to his family if he died. He got little wary and with great concern asked for advice. With the little knowledge I have, I told him to initially start with a recurring deposit (RD) of Rs 500 a month in a post office which is a safe investment and take a term life insurance policy, that will secure the future of his wife and kids in case he dies.

A few dark stations later, he told me that there are many who are in the same situation as his. I thought there must be crores of people like Srinivas who are earning fairly well but not being able to manage and grow their money. All they need is a 2 hour directional session and they can have a life that’s financially stress free.

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Srinivas is very keen to give his children a good higher education and put them on a higher berth on the inter-generational journey. We said our good byes and he promised that he would open a recurring deposit with a post office and buy a life insurance policy.

As I took the cycle rickshaw to my home, I felt that for people like Srinivas financial planning will change the way they see life and will be a beginning for a better future. With Chidambaram’s intent behind people like him, we will not only be able to see a more “inclusive” wealthier India, but the economy will also be able to deploy the money more efficiently.

But till such time that such intentions remain intentions, it is people like us who need to take the initiative. I know households who have opened post office accounts and SIPs for their drivers and maids. May their tribe increase.