FINANCIAL LITERACY AND STOCK MARKET PARTICIPATION IN NORTHEAST INDIA: A NARRATIVE REVIEW AND RESEARCH AGENDA

• Samuel Lalthanliana

  Research Scholar, Department of Commerce, Mizoram University

  Author

India has witnessed an unprecedented expansion of retail participation in equity markets since 2020, yet this growth remains geographically uneven, and Northeast India occupies a paradoxical position within it. Drawing on the international and Indian literature, this narrative review synthesises the evidence on the relationship between financial literacy and stock market participation and situates it within the specific context of the Northeast. It traces the theoretical foundations linking financial knowledge to equity-market entry, examines complementary social, behavioural and trust-based explanations, and consolidates the national Indian evidence before turning to region-specific data from the National Centre for Financial Education, the Reserve Bank of India, and the National Stock Exchange. A recurring tension emerges: the Northeast records comparatively favourable aggregate financial-literacy and banking-inclusion scores, while state-level studies from Mizoram document limited product awareness and low functional literacy, and absolute equity participation remains among the lowest in the country despite the highest recent growth rates. The review argues that financial literacy is a necessary but insufficient condition for capital-market participation, and that the region's recent surge is driven more by digital access than by knowledge gains. It identifies substantial gaps in regionally grounded, participation-focused research and proposes an agenda addressing measurement heterogeneity, longitudinal tracking, behavioural mediators, and culturally embedded barriers, with implications for financial-education policy and investor protection.

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