The article examines the numeracy and financial literacy of the Indian forest-dependent communities (FDC) involved in the joint forest management (JFM) programme, launched by the Government of India in 1990. An understanding of the financial literacy levels of the Indian FDCs may provide insights to policymakers regarding customized literacy programmes that can reduce exploitation from petty traders and local forest officials. The research draws sample data from FDCs of two geographical regions with differing resource endowments (Rayalaseema and the coastal region) in the Indian state of Andhra Pradesh. The results show that a third of the sampled members of the FDCs were able to answer the questions on probability and simple interest correctly. At least half of the sample had a clear idea on the time value of money and had less difficulty in computing when the mathematical questions were framed in the form of sentences which embedded situations from their daily lives. Participants, however, faced difficulty in recognizing mathematical symbols and performing simple computations in addition, subtraction, multiplication, and division. The average scores of the sample in the standard numeracy and financial literacy tests were 4.98 (out of 12 points) and 1.32 (out of 5 points), respectively.

The study also identifies some socio-economic determinants of (numeracy and) financial literacy. Education has a positive effect on both numeracy and financial literacy, while household size has a negative effect on numeracy, with no effect on financial literacy after controlling for education. Members of FDCs with habitations close to towns are likely to be more numerate and financially literate.

The study calls for a deeper comprehension of financial literacy that addresses the nuances of participatory forest management. Rigorous public programmes for imparting financial literacy to the FDCs will not only make the JFM programme more successful but also provide employment avenues to the women in the FDCs. Financial literacy programmes would also facilitate the ongoing digital inclusion programmes undertaken by the government in forest agency areas.