Passage - 2
Household finance in India is unique. We have a tendency to invest heavily in physical assets such as gold and property. Steps to encourage the financialization of savings are critical. A populace accustomed to traditional processes will not simply jump into financialization. Hurdles to change include onerous bureaucracy, a scepticism of organized financial institutions, a lack of basic information about which of the myriad services and providers is best for each family, and how (and even if) one can make the transition between them if necessary.

Regarding the financialization of household savings, which of the following statements best reflect the solutions that are implied by the passage?
1. A flexible environment is needed to develop solutions.
2. Households need customised solutions.
3. Innovations in financial technology are required.

Select the correct answer using the code given below :

Question

Passage - 2
Household finance in India is unique. We have a tendency to invest heavily in physical assets such as gold and property. Steps to encourage the financialization of savings are critical. A populace accustomed to traditional processes will not simply jump into financialization. Hurdles to change include onerous bureaucracy, a scepticism of organized financial institutions, a lack of basic information about which of the myriad services and providers is best for each family, and how (and even if) one can make the transition between them if necessary.

Regarding the financialization of household savings, which of the following statements best reflect the solutions that are implied by the passage?
1. A flexible environment is needed to develop solutions.
2. Households need customised solutions.
3. Innovations in financial technology are required.

Select the correct answer using the code given below :

Accepted Answer

Correct Option: 1, 2 and 3 The passage highlights that household finance in India relies heavily on physical assets like gold and property due to traditional habits, bureaucracy, skepticism of formal institutions, and lack of basic information about myriad services. To encourage financialization among a populace accustomed to traditional processes, the solutions implied are: (1) A flexible environment is needed to overcome bureaucratic hurdles and traditional rigidity; (2) Households need customized solutions because families differ and face informational gaps regarding which service is best; and (3) Innovations in financial technology are required to ease transitions and bridge the gap between traditional savings and formal financial systems. Therefore, all three statements (1, 2, and 3) are valid solutions implied by the passage. Option (d) is correct.

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