Understanding Consumer Preferences in Indian Government Investment Schemes: A Behavioral Finance Perspective

Abstract

In recent years, the Government of India has launched several investment schemes aimed at encouraging financial security and long-term savings among its citizens. Despite their economic benefits and guaranteed returns, participation rates vary significantly across demographics, suggesting that traditional financial theories may not fully explain investor behavior. This study explores consumer preferences for Indian government investment schemes—such as the Public Provident Fund (PPF), National Pension Scheme (NPS), Sukanya Samriddhi Yojana (SSY), and Sovereign Gold Bonds (SGB)—through the lens of behavioral finance.

The research investigates the influence of psychological biases, including loss aversion, status quo bias and mental accounting, on investment decisions. Using a structured survey administered to a diverse sample of urban and semi-urban investors, the study analyzes the interplay between financial literacy and behavioral tendencies. Key findings are expected to reveal the extent to which non-rational factors shape consumer choices and highlight the gap between awareness and action in investment behavior.

The results will offer insights for policymakers and financial institutions to design more effective communication strategies and user-centered investment products. Ultimately, the study aims to bridge the divide between policy intent and public adoption by aligning investment schemes with consumer psychology.