How financial maturity, access and adoption remains unevenly distributed in India: A study of two states

A new report finds that financial maturity, including awareness, access and adoption, remains low and unevenly distributed in India. The study based on respondents across Gujarat and Rajasthan on their financial maturity showed that both states had an overall similar reading on the financial maturity index.

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While Gujarat had a financial maturity index of 33.6 on a scale of 100, Rajasthan had a reading of 32 on the index. The report by IIM Udaipur, People Research on India’s Consumer Economy (PRICE) and JM Financial Centre for Financial Research was released on Wednesday.

“The comparative analysis between Gujarat and Rajasthan reveals a mixed performance pattern,” said the Financial Maturity Index: A Survey of Two States. It revealed that Gujarat performs relatively better in basic financial literacy, decision making, risk and resilience and overall FMI. Rajasthan scores relatively higher in sophisticated financial literacy, fintech adoption, behavioural finance, access to finance. “Financial planning and gender dimension remain weak and comparable,” it said.

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For policymakers, it came up with interesting findings. On pointed questions on everyday numeracy, it found that the majority of respondents in both states select ‘Spend now’ (about 57–60%). “While this is not a ‘right/wrong’ item, it is informative as a maturity marker: a higher inclination to save aligns with longer planning horizons and greater receptiveness to formal savings and investment products,” it said.

Similarly, the conceptual numeracy question of defining inflation was a demanding task for respondents with only 65.6% in Gujarat and 52.7% in Rajasthan choosing the correct option.

Sophisticated financial literacy and knowledge about financial products also remained low. Only about 12% of respondents reported having heard of and invested in the stock market, and about half had never heard of it at all. Second, product comprehension was low even among those exposed, especially for mutual funds, bonds, and diversification, concepts that require not just arithmetic but a mental model of how markets work.

The report revealed that only 13.6% in Gujarat and 10.7% in Rajasthan report having heard about and invested in the stock market. A much larger group has heard but not invested (35–37%), while about half in both states have never heard of the stock market at all.

Insurance is the strongest-performing product domain in this dataset, the study said, adding that most respondents understood the primary purpose of life insurance. The correct answer - financial security for the family in case of the policyholder’s death is chosen by 80.6% in Gujarat and 83.7% in Rajasthan. Misconceptions such as ‘quick profits’ are comparatively rare.

In terms of income consumed, both states on average consumed 71.2% of their personal annual income. But while Gujarat’s consumption share was 68.4% and Rajasthan’s was 74.4%.

The survey also revealed that nearly 99.8% of respondents said they save some amount of their personal income, but investing was rarer. But investing is much rarer. When asked if the respondent invests any amount, 24.3% overall responded affirmatively, with Gujarat being at 34.8 % and Rajasthan at 14.3%.

The dominant channel of savings was bank savings and fixed deposits—56.1% overall, with Gujarat at 54.4% and Rajasthan at 58.4%. Amongst other options, gold was the most commonly reported instrument, with 8.1% of respondents overall identifying it. Provident-type instruments, including EPF, PPF, and NPS, are reported by 4.9% of respondents overall while mutual fund participation was the lowest at 3.4% overall.

The study also revealed that across both states, behavioural patterns reveal a strong short-term orientation. “While many households report some form of savings, these are often irregular, precautionary, and quickly depleted by shocks,” it noted.

The study chose Gujarat and Rajasthan as they are two economically significant yet structurally distinct Indian states and reflect contrasting development trajectories, institutional environments, and socio-economic contexts. “Gujarat represents a state with a long history of industrialisation, entrepreneurial culture, relatively high urbanisation, and deep penetration of formal finance, particularly among micro-entrepreneurs, traders, and small manufacturers,” said the report. Rajasthan, in contrast, exhibits greater rural dispersion, stronger dependence on agriculture and informal livelihoods, pronounced social stratification, and historically lower levels of formal financial engagement in several regions, it further said.