The Economics segment of the recently introduced NCERT Social Science textbook for Grade 9, Part 2, includes chapters on personal finance and entrepreneurship, introducing students to essential financial concepts and the fundamentals of running a business.
Sharing details of the new chapters, Sanjeev Sanyal, a member of Prime Minister Narendra Modi's Economic Advisory Council, said students will learn the basics of fixed deposits, mutual funds, equated monthly instalments (EMIs), taxes, risk, and returns, among other topics. The objective is to equip students with practical financial knowledge and useful life skills.
In a post highlighting the changes, Sanyal said the textbook also includes a chapter on entrepreneurship. It introduces students to concepts such as profit and loss accounts and business plans while presenting risk-taking, innovation, and business activities in a positive light.
The economics segment of the recently introduced NCERT textbooks for Social Science (Grade 9, Part 2) now has a chapter on personal finance. Students are taught basics about fixed deposits, mutual funds, EMI, taxes, risk-return and so on. The idea is to provide them with useful life skills. 1/2
He said this approach was different from that of the previous textbook, which, according to him, placed emphasis on concepts such as hoarding and black markets.
NCERT Class 9 Economics Chapter On Personal Finance: What Will Students Learn?
The chapter on personal finance introduces students to the importance of managing money and making informed financial decisions. It covers questions such as what personal finance is, why it matters, the key pillars of personal finance, common savings and investment options, ways to protect savings and assets, and income tax.
The chapter begins by asking students to reflect on their experiences with money, such as receiving pocket money or money from relatives during festivals, and how they usually spend or save it.
Students are encouraged to consider questions such as:
Explaining the importance of financial planning, the chapter states that managing money begins in childhood. As individuals grow into adulthood, they earn income and spend it to meet their needs and wants. They also save and invest to achieve financial goals, such as buying a house or funding higher education.
It further explains that individuals and households make several financial decisions and that money is an important resource that needs to be used efficiently.
The chapter defines personal finance as the planning and management of an individual's money to meet their needs and wants. It involves making informed decisions about spending, saving, and investing.
Students will also learn about different savings and investment options, including the relationship between risk and returns.
The chapter explains that investments with lower risk generally offer lower returns, while those involving higher risks may offer higher returns. It also highlights the importance of choosing investments according to an individual's financial goals, willingness to take risks and the time at which they are likely to need the money.
The chapter introduces taxes as compulsory payments made by individuals and businesses to the government to fund public services and essential facilities, including schools, hospitals, transport and defence.
Students will learn about the following types of taxes:
1. Direct taxes: These are paid directly by individuals or organisations on their income or profits. Income tax is an example.
2. Indirect taxes: These are added to the prices of goods and services. The Goods and Services Tax (GST) is an example.
3. Personal income tax: This is the tax paid on the income an individual earns during a financial year, which runs from April 1 to March 31. Individuals whose income falls below the prescribed exemption limit are not required to pay income tax.
The chapter also explains why an understanding of personal finance is important and how individuals can manage their finances effectively.
