Expense Account, Mint
The draft National Strategy for Financial Education (you can read it athttp://www.sebi.gov.in/cms/sebi_data/attachdocs/1342416428845.pdf) put together by the apex regulatory body, the Financial Stability and Development Council (FSDC), is up for public comments right now. It is a joint effort by various financial sector regulators to have a common road map for getting 500 million people financially literate over the next five years. This is a goal that is very hard to argue against. Financial literacy is one of those “good” things that battles two charges globally. One, its efficacy is not clear. Reams of research give inconclusive results about the final outcome of a financial literacy class, initiative or programme. Two, and this is more damaging, the disclosure and education road is one that moves the regulatory burden over to the consumer. Born in the US, this concept is the brainchild of a Wall Street weakened regulatory approach. Disclose product specifications to a financially literate consumer and the buck smoothly moves from the regulator to the consumer and the actual buck moves from the clueless consumer to the seller. This approach knows, for example, that by the time the educators catch up with the latest product alert, the producers and sellers would have moved to the next level. And that asymmetry of information will always benefit the seller rather than the buyer.