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 customized solutions. 3. Innovations in financial technology are required. Select the correct answer using the code given below:

Passage

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.

Question

CSATEasyPrelims 2023Comprehension

Regarding the financialization of household savings, which of the following statements best reflect the solutions that are implied by the passage?

A flexible environment is needed to develop solutions.
Households need customized solutions.
Innovations in financial technology are required.

Select the correct answer using the code given below:

Explanation

The passage highlights the critical need to encourage the financialization of savings. However, it also opines that people would only jump into financialization after addressing some hurdles.

Statement 1 is correct: The line “Hurdles to change include onerous bureaucracy...” implies a rigid and challenging environment creating challenges in the financialization of household savings. Thus, a flexible environment is required to develop solutions to address the challenges related to the financialization of savings. Thus, it is a correct statement.

Statement 2 is correct: The line A lack of basic information about which of the myriad services and provers is best for each family. reflects that families do not have information and access to solutions that meet their specific needs. This can be solved by providing customized solutions to each household. Thus, it is a correct statement.

Statement 3 is incorrect: The passage focuses more on the scepticism of organized financial institutions and the lack of knowledge among households. While financial technology innovations can be beneficial in improving access to information and services, they are not directly implied as a solution in the passage.