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A developing economy faces many issues and challenges. Government tries to address these issues by framing appropriate policies and programmes. However, often the effectiveness of policies, programmes and schemes is limited on account of behavioural issues of the targeted public.  Although the government makes the best attempts to achieve the objectives, the success of the policies depends on attitudinal changes in the public even as behavioural changes are hard to bring about. In this context, the science of Behavioural Economics helps in understanding the peculiarities of human behaviour. It uses psychological perspective of human behaviour in order to understand and analyze economic behaviour of individuals and institutions, so that the desired outcomes can be achieved from the decision making process. While there are many theories and principles under the branch of Behavioural Economics, one of the recent theories propounded by the Nobel Prize winners, Richard Thaler and Cass Sunstein, is the Nudge Theory.

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