CAs as Vitiya Mitra – A Call to Action
CA. Huzeifa Unwala
The author is a member of the Institute. He can be reached at eboard@icai.in
“On an average, worldwide, only 1 out of 3 adults is financially literate. As per the survey conducted by S&P Global FinLit, Financial Literacy rate in India is 24% as compared to 57% in developed economies such as United States. As partners in nation building Chartered Accountants can play the role of force multipliers in the Financial & Tax Literacy (FTL) initiatives of our country. Read on….”
The CA Fraternity as “Lender of Last Advice”: Real-Life Scenarios
The Chartered Accountant fraternity has been a silent contributor at various life stages of our clients, family, and friends, acting as the lender of last advice to innumerable people. Let us revisit a few illustrative real-life examples of how CAs naturally play the role of Vitiya Mitra (Financial Friend):
Sudden Demise & Transmission
When there is an unfortunate and sudden demise in extended family or social network, a CA friend receives a stress call on how to claim monies lying in deceased bank accounts, complete nomination procedures, or execute urgent mutual fund redemptions to tide over bereavement liquidity crises.
First Job Offer & Take-Home Salary
When a young citizen responds to a job offer, he or she reaches out to a CA friend seeking assistance on computing the actual net take-home salary that will be deposited into their bank account post Tax Deducted at Source (TDS) and provident fund deductions.
ESOPs & Share-Based Compensation
When a start-up entrepreneur seeks strategic guidance on structuring share-based compensation payments or evaluating the precise perquisite tax and capital gains implications of Employee Stock Option Plans (ESOPs) in the hands of key talent.
Corpus Preservation & Annuity
When a senior corporate or government employee reaching superannuation seeks advice on how to allocate lifetime retirement savings across instruments that simultaneously ensure capital preservation, inflation hedging, and consistent regular monthly income.
The above are everyday instances where our fraternity selflessly guides society in the national interest. As a developing nation, India faces several monumental structural hurdles—foremost among them being pervasive financial illiteracy. Globally, financial literacy is now firmly established on the agendas of the G20, financial sector regulators, statutory bodies, and banking institutions.
“Globally financial literacy is now on the agenda of the G 20, financial services regulators, statutory bodies and financial services players as there is an awakening on the significance of the financial literacy or Vitiya shaksharta.”
Definitions and The Myth of General Literacy
Financial Literacy – For Individuals
“Financial literacy is ‘a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.’”— OECD/INFE High-level Principles on National Strategies for Financial Education (2012)
Financial Literacy – For MSMEs
“Financial literacy is the combination of awareness, knowledge, skills, attitudes and behaviour that a potential entrepreneur or an owner or manager of a micro, small or medium sized enterprise should have in order to make effective financial decisions to start a business, run a business, and ultimately ensure its sustainability and growth.”— OECD/INFE Core Competencies Framework on Financial Literacy for MSMEs (2018)
Debunking the Myth: Educated Does Not Equal Financially Literate
A pervasive myth in society is that formally educated individuals are inherently financially literate. Empirical investigations prove that highly educated professionals frequently fall prey to catastrophic financial blunders. Published data from Indian states demonstrates that even in highly literate states like Kerala—where general literacy stands at 84% to 90%—financial literacy is restricted to merely 36% to 40% (National Centre for Financial Education Report, 2015).
As observed by a former Governor of the Reserve Bank of India (RBI): “The most fundamental reason why people should strive to become financially literate is to help them reach their personal financial goals. From a national perspective, the payoff is large.” Financial and tax education is thus a vital macro-strategic priority because:
- The stability of the national financial architecture is intrinsically linked to the quality of financial decision-making at the household level.
- Financial literacy expands financial inclusion, compresses socioeconomic disparities, and fosters equitable, inclusive growth.
- Disseminating financial education bolsters consumer resilience against major systemic and personal economic shocks.
- Building trust is the prime prerequisite for economic stability in the digital era; financial literacy and robust consumer protection empower citizens to become confident, safe users of formal financial services.
Financial Inclusion on the Global Agenda: 7 United Nations SDGs
Adopted by the United Nations in 2015, the 17 Sustainable Development Goals (SDGs) represent a universal call to end poverty, protect the biosphere, and achieve global prosperity by 2030. Financial inclusion has been formally designated as an indispensable enabler across seven key SDGs, providing clear touchpoints for CA interventions:
“Chartered Accountants are well known for their expertise in finance and tax. They can play a vital role in promoting financial inclusion by creating awareness among the people about financial literacy and can foster gradual nation building.”
ICAI’s Institutionalized Platform: Vitiya Gyan Portal
To institutionalize national financial education, the Institute of Chartered Accountants of India (ICAI) has launched a dedicated portal: https://vitiyagyan.icai.org/.
The Vitiya Gyan portal offers an authoritative starting point for CAs to expand their reach, presenting foundational financial and tax concepts across multiple Indian regional languages as well as English. CAs can utilize this digital infrastructure to conduct corporate seminars, community workshops, and mass outreach campaigns.
Combating Scams, Leveraging Social Media & The 4 Educational Pillars
With digital penetration surging into rural and semi-urban hubs, tech-savvy CAs are actively producing short, interactive educational content across YouTube, WhatsApp, and Instagram to guide the public. Simultaneously, with financial scams, fraudulent schemes, and unregistered investment syndicates multiplying, Chartered Accountants must act as vigilant gatekeepers advocating safety and ethical literacy.
The 4 Core Practical Educational Pillars for the Masses:
1. Benefits of Record Keeping
Accurate documentation enables individuals and micro-enterprises to track cashflows, organize liabilities, provide tangible proof of income for credit approvals, and establish a verifiable track record for long-term wealth creation.
2. Discipline of Budgeting (50:30:20)
Educating citizens to spend on “needs first, wants later, and never on waste!” Instilling golden budgeting benchmarks—such as allocating 50% to essential Needs, 30% to Wants, and 20% to structured Savings & Debt Retirement.
3. Positive Debt Cycles
Ensuring borrowers understand effective interest rates, compounding tenures, processing charges, and penal clauses, steering credit away from depreciating consumption toward acquiring income-generating productive assets.
4. Financial Risk Management
Mitigating personal and business vulnerabilities by cultivating multiple revenue streams, creating an inviolable emergency contingency fund, and purchasing term and health insurance policies to transfer catastrophic risks.
“CA as Vitiya Mitra can be a financial friend to the masses who can guide the society on ‘Life Skills’ such as Investment basics, Tax basics, Insurance basics, Savings for short term & retirement, Estate planning, Will writing and so on.”
Empowering Aspiring CA Students: Take Initiative & Volunteer!
CA students undergo intensive rigorous coursework in accounting, taxation, costing, and corporate finance. Blended with practical Articleship exposure, CA students possess unique, practical competencies to resolve financial and tax illiteracy:
Four Actionable Volunteering Avenues for Students:
- Knowledge Broadening: Proactively participate in financial literacy workshops and investor protection symposiums.
- Campus Outreach: Start within collegiate networks, motivating university faculties to integrate structured personal finance seminars.
- Field Volunteering: Actively partner with community centers, self-help groups, and local trade associations to conduct basic literacy bootcamps.
- Thought Leadership: Contribute insightful, plain-language financial articles to student journals, newsletters, and digital media platforms.
The National Imperative: A Call to Action
The Paradox: 5th Largest Economy vs. 101st in Global Hunger Index
India being the 5th largest economy in the world also ranked 101st out of 116 countries in the Global Hunger Index (GHI) 2021, signifying that tens of millions of citizens continue to languish in extreme poverty. While financial illiteracy is a global challenge, India’s 24% rate severely lags global peers.
We Chartered Accountants, functioning as Vitiya Mitras, must unleash our professional intellect as a potent catalyst to uplift Indian citizens toward self-reliance. Only through universal financial and tax literacy can our nation capitalize on its historic demographic dividend. India urgently calls upon its CA Vitiya Mitras to liberate our nation from the tag of a developing economy and propel it into an economic powerhouse.