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GEN Z AND FINANCIAL LITERACY

“Financial education should start early in the home with parents who have open dialogues with their children about money and are positive role models, helping to establish behaviours they want their children to adopt,” – Dr. Billy Hensley, CEO and president of the National Endowment for Financial Education. In this rapidly evolving digital age, Gen Z became the first of generations to grow with smartphones, computers and internet. Being the first digitally native generation, Gen Z wields unprecedented influence and potential, and their financial acumen will shape the economic landscapes of tomorrow.  According to 2022 Investopedia Financial Literacy Survey, Generation Z adults appear to be more financially sophisticated than any previous generations of their age. By valuing peace of mind over wealth, seeking financial education on their terms, and facing a complex financial landscape that requires new literacy approaches Gen Z has redefined financial success. Approximately 54% of the Gen Z holds some kind of investment. About a quarter of Gen Z holds cryptocurrencies and stocks and 1 in 10 own NFTs. Financial Literacy and Habits – A blend of enthusiasm and Digital Knowledge The financial habits of Gen Z are closely shaped by the environment in which they have grown up. Having been raised in an era defined by rapid technological advancement, economic volatility, and unprecedented access to information, they naturally demonstrate greater caution and awareness in managing their finances from a younger age. How Gen Z is Redefining Personal Finances in India Gen Z, comprising individuals born between 1997 and 2012, is emerging as a significant influence within the Indian financial sector. Distinct from earlier generations, this cohort demonstrates an equal commitment to saving, investing, and long-term wealth creation, alongside earning and consumption. Their financial behaviour is characterised by enhanced financial literacy, strong technological proficiency, and greater access to digital financial platforms, positioning them as a well-informed and forward-looking segment of the investor community. According to a Deloitte report, Gen Z constitutes over 27 percent of India’s population, placing a substantial portion of this cohort within the nation’s workforce or on entrepreneurial paths. Consequently, their evolving consumption patterns are exerting a significant influence on sectors such as fintech, wealth management, and banking. The Emergence of Financial Literacy Among Gen Z Financial literacy is increasingly becoming a priority for Gen Z in India. In contrast to earlier generations, who often developed financial skills through gradual trial and error, this cohort is proactively seeking knowledge through both formal and informal avenues. A 2023 NASSCOM study indicates that over 40% of urban Gen Z engage with personal finance content on a regular basis. Their learning sources include YouTube tutorials, Instagram and LinkedIn content, as well as financial podcasts. Among these, Anupam Gupta’s “Paisa Vaisa” ranks among the most influential, offering clear explanations of complex financial concepts through expert interviews and practical examples. Edtech and gamified platforms have emerged as additional contributors to financial education. Applications such as Kiddopia, Birdfin, and Junio expose adolescents to fundamental financial management skills such as saving, budgeting, and responsible spending through interactive, game-based methods. This early exposure is helping to establish a strong foundation for future financial decision-making. The rising interest in financial learning is also reflected in the increased demand for certified programmes in investment and financial planning. Courses in investment banking, equity analysis, and related fields are attracting students seeking deeper technical understanding of financial instruments and market dynamics. Overall, Gen Z is not merely acquiring basic money management skills; they are developing a sophisticated level of financial awareness. This growing financial acumen is positioned to enhance their resilience and capability in navigating both personal financial responsibilities and broader economic uncertainties. Digital Investment and Payment Ecosystems: Gen Z’s Expanding Financial Toolkit Challenges and Concerns: The Flip Side of Digital Financial Literacy Although Gen Z exhibits strong technological proficiency and a growing interest in financial independence, several challenges continue to impede their path toward comprehensive personal financial management. Misinformation and Overconfidence The abundance of online financial content presents both opportunities and risks. Not all publicly available advice is accurate, regulated, or appropriate for inexperienced investors. As per a 2023 SEBI study, more than 30% of first-time investors under the age of 25 acknowledged making investment decisions based on unverified social media recommendations.This reliance on non-expert guidance combined with early success in speculative investments can foster overconfidence, increasing the likelihood of impulsive or high risk financial decisions. Limited Long-Term Financial Planning While Gen Z demonstrates strong interest in investing, many still face difficulty with long-term financial planning. The pursuit of quick returns often takes precedence over strategic elements such as retirement planning, asset diversification, and structured, goal-based investing. These gaps can be addressed through targeted financial education. Courses in financial analytics, for example, equip young professionals with skills in forecasting, scenario modelling, and portfolio optimisation, enabling them to evaluate financial opportunities with a long-term lens. Cybersecurity and Data Privacy Risks High reliance on digital platforms increases exposure to cybersecurity threats, including data breaches, phishing attempts, and identity theft. Although fintech applications have strengthened security frameworks, the overall level of user awareness regarding digital safety remains inconsistent. Modern financial literacy, therefore, must also encompass digital hygiene practices an area increasingly being integrated into educational and professional training programmes. Opportunities for Financial Institutions and Educators The shifting financial behaviour of Gen Z offers significant potential for banks, fintech companies, and educational institutions to shape and support this cohort’s financial development. Customized Financial Products Financial service providers can develop tailored products such as youth-oriented savings plans, micro-investment portfolios, and flexible insurance offerings. Integrating features like gamification, real-time analytics, and options for socially responsible or impact-driven investing can further enhance engagement and adoption among younger users. Conclusion Gen Z is decisively reshaping the contours of India’s financial sector. Their financial behaviour is rooted in digital proficiency, a strong appetite for self-directed learning, and an assertive approach to personal wealth management that signals a structural shift in how future generations will engage with financial systems. They are no longer peripheral

RECENT GST RATE CHANGES IMPACT ON AUTOMOBILE SECTOR

GST AND ITS ORIGIN Goods and Service Tax widely known as GST is an indirect tax imposed on the supply of goods and services. It is a multi-stage, destination-oriented tax that is applied at every step of value addition in the supply chain, replacing multiple Indirect taxes in India. Originally, introduced in India in 2000 after a committee was set up by then Prime Minister Shri Atal Bihari Vajpayee, a task force, headed by Finance Minister Mr. Vijay L. Kelkar, but constitutionally came into force by the 101st Amendment Act of 2017, introduced by then Finance Minister Mr. Arun Jaitely. GST fosters barrier-free movement of goods and helps in realising “One nation, one market” and “one taxbase and one tax”.The unified tax structure and increased compliance have led to better tax collections, benefiting both the Central and State governments. GST 2.0 At the 56th meeting of the GST Council, chaired by Union Finance Minister Smt. Nirmala Sitharaman approved Next-Gen GST reforms, with focus on improving the lives of the common man and ensuring ease of doing business for all, including small traders and businessmen. The previous four-tier structure (5%, 12%, 18%, and 28%) has been largely replaced by a two-slab system: a 5% merit rate for essentials and a 18% standard rate for most other goods and services. A new 40% demerit rate was introduced for luxury and “sin” goods like tobacco and high-end cars, replacing the earlier 28% plus cess. 7-Pillars of Next-Gen GST Reforms The 7 pillars of the Next-Gen GST reforms (referred to as “GST 2.0”) unveiled in September 2025 are a set of initiatives designed to simplify India’s tax system, boost the economy, and reduce the burden on citizens and businesses.  The seven pillars are:  GST on Automobile Cars are covered in the scope of supply as defined by the GST law without any exemption. However, vehicles used by physically disabled persons are exempted from GST. Introduction of GST in Automobile sector has transformed vehicle taxation in India by replacing earlier complex structure of multiple taxes such as excise duty, VAT, and various state-level levies making it more efficient. In the 56th GST Council meeting (3rd September 2025), important changes were introduced for the automobile sector, making small cars more affordable while luxury and larger hybrids became costlier.  Impact of new GST rates on the Automobile Industry The implementation of new GST 2.0 has brought significant transformation to the automobile industry making it more efficient. The elimination of compensation cess on most vehicles and the rationalization of tax rates is expected to lower prices which will directly benefit the consumers.   Changes in GST Rates Impact Small Cars Reduced from 29-30% to a uniform 18%. Likely to drive higher demand at entry-level segment, making cars more affordable for a broader audience. Luxury Vehicles and SUVs Increased from 28% to 40%; Compensation cess (up to 22%) removed. Reduction in overall tax burden by removal of compensation cess; simplifies tax framework and resolves classification issues. Buses, trucks, 3-wheelers Reduced from 28% to 18% Making them more affordable New GST Rate on Cars (Effective from September 22, 2025) Description Old Rate New Rate Petrol, LPG, or CNG motor vehicles up to 1200 cc and length up to 4000 mm 28% + 1% Cess 18% Diesel motor vehicles up to 1500 cc and length up to 4000 mm 28% + 3% Cess 18% Motor cars and other passenger motor vehicles (other than above listed) 28% + 15-22% Cess 40% Hybrid vehicles (spark-ignition + electric motor) up to 1200 cc engine and length up to 4000 mm 28% + 1% Cess 18% Hybrid vehicles (spark-ignition + electric motor) over 1200 cc engine or length over 4000 mm 28% + 15-22% Cess 40% Hybrid vehicles (compression-ignition + electric motor) up to 1500 cc engine and length up to 4000 mm 28% + 3% Cess 18% Hybrid vehicles (compression-ignition + electric motor) over 1500 cc engine or length over 4000 mm 28% + 15-22% Cess 40% All categries of electric motor vehicles 5% 5% Let’s consider an example of Diesel motor car below 1500cc with length up to 4000mm Particulars GST at Old Rate GST at New Rate Ex-Showroom Price 10,00,000  10,00,000  GST Old @28% 2,80,000  –    GST New @18% –    1,80,000  Cess @3% 8,400  –    Total Taxes 2,88,000  1,80,000  Exemptions of GST Rates on Car Indian government offers special GST concessions on four types of vehicles to promote affordability, accessibility, and sustainability. Input Tax Credit on Motor Vehicles Section 17(5) talks about blocked credit and thereby disallows ITC on certain motor vehicles. ITC is not available on motor vehicles used for transport of persons with a seating capacity of less than or equal to 13 persons including the driver. ITC is available when vehicles are used for below purposes: Lets elaborate on the availability of ITC on cars: GST on Import of Cars Import of cars attracts IGST. The value considered for calculating IGST is the assessable value + basic customs duty. To promote ‘Make in India’, the government has increased customs duty on imported cars: Customs duty is included in the value for charging IGST. This will lead to an increase in IGST amount as well. Thereby increasing the overall price of the product. Conclusion GST 2.0 has brought a major transformation to automobile taxation in India. By simplifying the tax slabs and eliminating the Compensating Cess the government has enhanced transparency. Lower tax rates especially on small cars and EVs have made it more affordable for consumers, which will stimulate the demand in the market and sustain growth in the automobile sector. The introduction of flat slab of 40% and eliminating compensation cess on luxury cars have streamlined taxation and lowered the overall tax burden.

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Stay ahead of the curve with emerging trends that are reshaping industries and customer expectations.

NEW LABOUR CODES

Stay ahead of the curve with emerging trends that are reshaping industries and customer expectations.