Sucheta Dalal :Financial Literacy Farce
Sucheta Dalal

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Financial Literacy Farce  

January 27, 2010

India’s investor population has always been considered rather skewed and concentrated in the states of Gujarat, Maharashtra, Rajasthan and the larger cities in the south. But you would have a completely different notion, if you were to go by the list of 69 NGOs accredited and eligible to receive funds from the Investor Education & Protection Fund (IEPF) of the Ministry of Corporate Affairs (MCA). This Fund, of over Rs400 crore, carved out of unclaimed dividends, interest and other proceeds, is disbursed in driblets to accredited NGOs for investor education seminars. Of the 69 eligible NGOs, a dozen-odd are well known. The rest, going by their names and locations alone, probably have little or nothing to do with financial markets and investment. For starters, the highest number of accredited NGOs—as many as nine—is from Orissa. They have names like Basti Area Development Council, Centre for Community Development, Centre for Alternative Training, Evaluation and Research, Gania Unnayan Committee, Yuga Murti Seva Ashram, ODD Foundation, and March of Youth for Health, Education & Action for Rural Trust.

Similarly, there are four accredited associations from Kolar district of Karnataka which is known for its goldfields and rich politicians who control mining, but not for any significant investor population. These are: Environmental Research Institute and Human Care, Shree Jnanodaya Gramin Vidya Trust, Gram Vikas Society and Surya Rural Development Society. Consider some other accredited entities—Avadh Grameen Vikas Sansthan from Sultanpur, Kisan Bal Avam Mahila Kalyan Samiti from Gonda and the Bharatiya Mahila Kalyan Samiti from Barabanki (all in UP); Dompukar Human Development Society and Karimpur Social Welfare Society of West Bengal; Gram Vikas Parishad of Assam, Harihar Bahuuddeshiya Sanstha of Wardha in Maharashtra, Mahadev Vikas Samiti of Gwalior and so on. These may be great NGOs, but how do they qualify for a share of investors’ unclaimed funds? Is it any wonder then that India’s retail investor population has halved?

-- Sucheta Dalal