In response to declining water levels in the city's reservoirs, the municipal corporation has banned the use of hosepipes for washing cars and watering gardens. To promote conservation, they have distributed pamphlets detailing rainwater harvesting techniques to every household. Despite these efforts, water consumption has not decreased significantly. Consequently, the authorities have announced that a steep "drought surcharge" will be added to the water bills of households exceeding a specific monthly limit. As per the passage, which of the following is an assumption? 1. Financial disincentives are effective in motivating citizens to reduce their resource consumption. 2. The drought surcharge is the only way to solve the water crisis in the city. 3. Most households in the city have the space and resources to implement rainwater harvesting.

The municipal corporation tried bans and awareness pamphlets, but consumption did not drop. They have now turned to a "drought surcharge" (a financial penalty) to achieve their goal of reducing water use. This decision is based on the assumption that a monetary cost or financial disincentive will successfully motivate people to change their behavior and conserve water. Thus, statement 1 is an assumption. Statement 2 is incorrect as it is an extreme claim. The passage describes this as a "consequent" step, but it doesn't assume it is the only possible solution in existence. Statement 3 is incorrect because the authorities distributed the pamphlets to promote the technique, but their decision to impose a surcharge does not rely on the assumption that everyone can harvest rain; it relies on the hope that people will simply use less tap water. Hence, option (A) is the correct answer.