##1 in 2012. as per latest census, 58. 7 percent households were availing banking services in 2011 as compared with 35. 5 percent in 2001. notwithstanding these efforts by the reserve bank and the financial sector, the challenges are enormous. providing banking coverage to a population of 1. 2 billion and ensuring transactions in these accounts is a daunting task. the synergy between aadhaar cards, mobiles, banking accounts and electronic benefit transfer has to be fully utilized to make banking in the unbanked regions a viable, low cost business. simplification in kyc documentation requirements for small accounts done recently will also go a long way in fostering financial inclusion. financial outreach and literacy 42. along with improving aggregate literacy levels, promoting financial literacy among masses is now well recognized as an important demand side input towards achieving the goal of financial inclusion. lack of financial awareness and literacy is one of the main reasons behind low level of transactions in the accounts newly opened under our financial inclusion initiatives. by making the poor financially literate, we can empower them to take informed decisions with regard to their savings, borrowings and investment. by bringing the poor into banking business, overall domestic and household savings rate could rise, thus, leading to higher and more sustainable growth. 43. recognizing this, the reserve bank, through its financial outreach programmes, has helped in spreading awareness and improving financial literacy. as part of these programmes, the top management visits villages across the country to interact with the villagers to understand their problems and expectations and, at the same time, tell them bis central bankers ’ speeches about reserve bank ’ s policy initiatives and the advantages of being linked to the formal banking sector. with an objective of promoting financial literacy, reserve bank had advised banks to set up financial literacy centres ( flcs ). the flcs are expected to impart financial literacy in the form of simple messages. 44. in order to ensure effective coordination of the efforts made by all the financial regulators and other stakeholders, a technical group on financial inclusion and financial literacy has been constituted under the aegis of the financial stability and development council ( fsdc ) having representation from the reserve bank, securities and exchange board of india, insurance regulatory and development authority, government of india, state governments, central education board, etc. the group is in dialogue with ncert, cbse and state education boards for inclusion of financial literacy in school curriculum. d. conclusion 45. to conclude, today the definition of development is fast

usha thorat : inclusive financial system for the aged speech by ms usha thorat, deputy governor of the reserve bank of india, at the 8th annual ieef retirement policy conclave, jointly hosted by invest india economic foundation ( ieef ) and the pfrda, new delhi, 30 april 2008. * * * changing contours of indian population india, the seventh largest country in size, continues to occupy the second largest populated country after china. the aged population in india ( i. e. over 60 years ) that stood at 84. 7 million ( 7. 5 per cent ) in 2005 is expected to rise to 141 million ( 10. 2 per cent ) by 2020 and thereafter reach 194 million ( 13 per cent ) in 2030. even though income levels are going up and poverty declining, it can be reasonably expected that a significant number among the aged population would be in the low income category. the aged population requires additional attention both from the society and from the government. more funds need to be allocated for pension, health and other social benefits of the aged people, while declining savings of the aged population could pose a threat in meeting such additional expenditure. india is one of the highest savers among the emerging market economies. gross domestic saving, as percentage of gdp at current market prices, increased from 23. 5 per cent in 2001 - 02 to 34. 8 per cent in 2006 - 07. household savings rose from 22. 1 per cent in 2001 - 02 to 23. 8 per cent in 2006 - 07. financial savings however constituted only 47. 5 per cent of total household savings in 2006 - 07. preserving the value of savings till as late as 10 years ago, we had a fairly long period high inflation and interest rates ; many persons planned their savings for old age, assuming that these rates would continue for long. the drop in rates after 1998 led to decline in returns for the retired who were dependent on interest income. employers providing defined benefit schemes found that the extent of unfunded portion of the liability was increasing. not all persons realised that they needed to save at rates higher than the inflation rate ; inflation could erode the value of their savings and that health care and typical old age expenses could eat into their capital. the reserve bank ’ s goal of inflation of around 3 per cent in the medium term, as articulated in its monetary policy statements, is thus critical not only for maintaining self accelerating growth and greater integration with global economy, but also to ensure