Passage 1

A persistent issue with micro-pension schemes is their low uptake among the poor, who often have a strong urge to allocate limited funds toward immediate consumption. In this context, increasing participation can be achieved through behavioural interventions. These interventions could involve changing how information is presented, simplifying the enrolment process (for example, using UPI-enabled pension payments), and providing timely reminders. Young people in India may not feel an immediate need to secure an optimal pension plan. The old-age dependency ratio is about 15.7 per cent, which is significantly lower than in many Emerging Market Economies. However, this should not lead to complacency. The best time to repair a roof is when the sun is shining, not when it is raining.

Which one of the following statements best reflects the central idea of the above passage?

(a)India should overcome low participation in micro-pension schemes by the poor, through behavioural interventions and proactive measures.

(b)Behavioural interventions are a panacea for all challenges related to the financial inclusion of the poor.

(c)India's current low old-age dependency ratio is a misleading indicator of future old-age income security.

(d)The simplification of enrolment processes through digital means like UPI is the single most effective way to address the low uptake of micro-pensions.

Question

Passage 1

A persistent issue with micro-pension schemes is their low uptake among the poor, who often have a strong urge to allocate limited funds toward immediate consumption. In this context, increasing participation can be achieved through behavioural interventions. These interventions could involve changing how information is presented, simplifying the enrolment process (for example, using UPI-enabled pension payments), and providing timely reminders. Young people in India may not feel an immediate need to secure an optimal pension plan. The old-age dependency ratio is about 15.7 per cent, which is significantly lower than in many Emerging Market Economies. However, this should not lead to complacency. The best time to repair a roof is when the sun is shining, not when it is raining.

Which one of the following statements best reflects the central idea of the above passage?

(a)India should overcome low participation in micro-pension schemes by the poor, through behavioural interventions and proactive measures.

(b)Behavioural interventions are a panacea for all challenges related to the financial inclusion of the poor.

(c)India's current low old-age dependency ratio is a misleading indicator of future old-age income security.

(d)The simplification of enrolment processes through digital means like UPI is the single most effective way to address the low uptake of micro-pensions.

ONLiNE UPSC · Accepted Answer

Statement (a) is correct: This statement accurately identifies the core problem (low pension uptake by the poor due to preference for immediate consumption), the proposed solution (behavioural interventions with examples), the target group (the poor), and the author's call for proactive action despite current demographic indicators (low dependency ratio, "repair the roof" analogy).

Statement (b) is not correct: The passage proposes behavioural interventions specifically for "increasing participation" in micro-pensions. It does not claim they are a "panacea" (a solution for all difficulties) for all challenges of financial inclusion.

Statement (c) is not correct: While the passage cautions against complacency due to the low dependency ratio, stating it's "misleading" might be too strong. The crucial message is more about action despite this ratio.

Statement (d) is not correct: Simplification via UPI is given as one example of a behavioural intervention. The passage advocates for a range of such interventions, like changing how information is presented, simplifying processes, providing timely reminders, etc. and doesn't single out UPI simplification as the "single most effective way."

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