Indians are increasingly preferring financial assets over physical assets, which has led to the ‘Financialisation’ of savings in the country. With respect to this, which of the following steps if taken by government , will help in Financialisation of domestic savings 1.Government allowing Common people to invest in infrastructure projects 2.RBI allowing retail investors to open gilt account 3.Reducing the import duty on gold and gold products. Select the correct answer using the given code below-

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A

Notes:

Statement 1 and 2 are correct– India has been consistently ranked among the top importers of gold globally. Indians have a habit of saving, but the bulk of household savings has been traditionally allotted to physical assets like real estate and gold.
Indians are increasingly preferring financial assets over physical assets, which has led to the ‘financialisation’ of savings in the country. Both these steps will widen the investment basket available for common Indian retail investor.
Statement 3 is wrong– As this will further promote consumption of gold(Physical asset).

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