This is a stage of faith in the method (means), faith in oneself (confidence) and faith in the Master (Goal). The method is understood as the only way to come out of the disturbed state of mind. The means gets established, traditionally called as a state of upaaya nirnayam.

Bhakti is towards Guru. Shraddha is towards the method

Faith is the confidence, method is the means and Master is the goal. Confidence in the means and Goal, arhata, upaya and upeya. Arhata, means, am I fit? Many people think they are not fit but the question does not arise. Every person is competent. Is arhata there? yes.

Traditionally, it is told that to get arhata, you have to do japa for a number of years prescribed, and then come for further progress, or you are asked to do a puja and come. Then only they used to say we have arhata, otherwise not. Atleast you are asked to wear the sacred thread, otherwise you are refused teaching. If brahma vidya has to be taught, then the person is asked if yajnopavita is there, otherwise they are denied. That is the arhata, that is the basic.

That is not our concept, our concept is, every person is entitled to have this knowledge. Arhata is not based on birth, the caste or certain rituals. It is only the aspiration. If you got the aspiration, you have got the right. Arhata is the question of deservancy or eligibility. The concept of arhata is there in buddhism also. A person does not become eligible unless he follows certain rules. Arhat is the first stage of spiritual development. Here in our system, we don't insist on that arhata. Any person who is willing to learn, we are prepared. All that we are saying is you have the confidence, do not think somebody else knows, you don't know, you cannot know, you are not entitled to know. This type of notions, we need not have. Second is the means, upaya is the method and upeya is the Goal, the Master. In shraddha we stress on upaaya nirnayam. In our concept of shraddha, all three have to be there. In all three of these, we get confidence. Now that you have covered already some distance, you definitely know you are very competent. Although in initial stages, we may not have had the confidence when we started the journey as a serpent, but as we come to this stage, we definitely feel that we are capable of knowing. You come to that stage.

If you read Reality at Dawn, Faith chapter, this is the Sraddha that is talked about.. Traditionally it is called upaaya nirnayam, for us it is sraddha. The chapter on Faith is Shraddha.