Following is the Text of the Speech delivered by Shri
R.P. Watal, Secretary (Expenditure) here today at the Inauguration
of Cross Regional International Conference organized by Ministry of Finance and
World Savings Bank Institute from 28th to 30th October, 2014
“On this occasion of Cross Regional
International Conference, I welcome participants from various countries,
officials of World Saving Bank Institute and other officials from Government.
It is matter of pleasure that the
Cross Regional International Conference is being organized in India. As a
nation our significant population is young and youth will continue to represent
a large proportion of our citizenry in near future. Considering such
demographic profile of India, the subject matter and deliberations of the
Conference with focus on ‘Increasing the Financial outreach in youth’ will
be of significant value to us.
I note with satisfaction that the
conference is well represented by eminent experts in this field and people
having vast experience in running saving programme in their region. Your inputs
and shared experiences will provide further momentum to savings movement.
India as a society is driven by the
ethos of savings for our future generations and acquiring knowledge.
There is a verse in one of our classical and one of the oldest languages
Sanskrit;
क्षणश: कणशश्चैव विद्यामर्थं च साधयेत ।
क्षणे नष्टे कुतो विद्या, कणे नष्टे कुतो धनम ।।
क्षणे नष्टे कुतो विद्या, कणे नष्टे कुतो धनम ।।
The verse implies that knowledge and
wealth can only be acquired gradually by investing time and sustained savings,
respectively. If one does not invest time, knowledge cannot be acquired and
unless one saves, wealth cannot be built. Not surprising, it is common
place in India to set aside a sum as first charge from the income for saving
for future generations and educating them.
With such rich tradition, India has
always been a partner in the international effort to promote savings. Since
1924, when India was one of the signatory to the International Savings
Congress, we have been unsparing in our efforts to inculcate the habit of
thrift and savings have often helped us in tiding over difficult economic
situation.
While promoting savings it has to be realized that Government acts as the
custodian of the pooled savings of some very under privileged sections. It is
the responsibility of the Government to ensure that such household savings are
completely secure, earn a good return to the investor and the money is
available to the investor at the time of his or her requirements . Further this
pooled wealth is channelized for the purpose of creating durable assets in the
country.
To address these challenges, the
first regulatory framework in India dates back nearly 130 years with the
enactment of Government Savings Bank Act. In the post colonial period,
Constitution enjoined upon the State moral responsibility to bring in economic
equality and provide avenues for economic prosperity to all its citizens.
Savings is one vehicle to usher in economic prosperity.
Responding to the responsibility
placed by the constitution Government expanded the legal framework for small
savings instrument to meet the enhanced requirement. To mobilize savings
through Savings certificates, Government enacted a Savings Certificate Act in
1959 and to provide a social safety net to those working in the un- organized
sector a Public Provident Fund Act was brought in 1968.
All the instruments and schemes to
channelize small savings were made fully secure by the Government and carry the
implicit guarantee of the Government. These instruments provide easy access and
have features to provide liquidity to the saver. There are significant tax
incentives extended by the Government to those making investments.
Contribution of domestic savings in
National Development has been remarkable. India is ‘one’ among the counties
having a high rate of domestic saving, which is at present to the tune of 30%
of its GDP. The domestic financial savings rate which had declined during last
few years has again shown recovery and with propagation of the programmes to
encourage people to save more, we expected to attain a higher savings rate. The
Government as a policy is committed to revitalize and strengthen the network
which promoted savings among the masses.
India has taken various measures to
encourage savings in the recent past. “Jan Dhan Yojana” of financially
including those who are left unbanked is a major step in this direction.
Further, Government has significantly expanded the bouquet of small savings
scheme. A special scheme for the Girl Child will be shortly announced by the
Government to address the gender imbalance. Similarly, a scheme with insurance
cover to the under privileged is being worked out. Similarly schemes are being
reintroduced and expanded to increase the flow of savings towards productive
purposes. Recently, we have increased the tax incentive on investment made from
small savings by 50%.
Children and young people are the
future economic actors whose financial decisions, as prospective family heads,
employees and community contributors, will impact, ultimately, on the stability
of world economies. They need to be prepared to take on this role and
responsibility. In order to be effective they need to start dealing with
financial matters as early and young as possible. This needs support from both
their family and their schools. Thus it is up to all of us to enable the
systematic and structural platforms for extending opportunities to the young
people. It also involves the creation of social and cultural environment and
legal and regulatory framework to facilitate the financial engagement of
children and youth.
India has one of the highest ratios
of young people who are below the age group of 35 years. It is expected that
nearly 2/3rd our population will ne young in coming decades.
Similar situation is faced by other developing nations as well. This is
the greatest strength of the India economy of today. The relationship between
youth and formal financial service providers needs strengthening. This can be
done by traditional means as well as with the use of technological means at
various levels since today’s youth is more familiar with technology. The same
can attract them towards the financial products. I am sure, this WSBI Cross Regional
Conference will address the issues of meeting this challenge and working out
strategy to motivate the young to open and use their accounts.
India is committed to revitalize the
small savings for the benefit of small savers and sustaining economic development.
The cooperation between Government agencies like National Saving Institute,
Department of Posts and Banks with the International organizations like
World savings Banks Institution, is a welcome step in this direction and
I expect that this Conference will be helpful in formulation of new strategies
based on the experiences of the esteemed delegates who have come all the way to
India and in turn, they will also get enriched by the experiences of India in
mobilization of resources and promotion of savings.
Financial inclusion is one of the
most potent weapons to fight against poverty. I would thus like to emphasize
that such cooperation should not end with this conference but must continue so
that strategies for financially including those who are not a part of process
are constantly built and recalibrated . Further, the massive challenge of
financial engaging the youth is adequately met. With these words, I wish the
conference all the success.”
PIB