Question

Given below are two statements: one is labelled as Assertion A and the other one is labelled as Reason R.
Assertion A: Industrial Development Bank of India (IDBI) caters the financial needs of the budding industries.
Reason R: Financial constraint is one of the biggest reasons of business failures in entrepreneurship and there is need to provide financing support to them.
In the light of the above statements, choose the most appropriate answer from the option given below:

• A. Both A and R are correct and R is the correct explanation of A
• B. Both A and Rare correct and R is the NOT the correct explanation of A
• C. A is correct but R is not correct
• D. A is not correct but R is correct

Answer 1

The Correct Option is A

To determine the correct answer to this question, we need to examine both the Assertion (A) and the Reason (R) provided, as well as their relationship:

1. Assertion (A): "Industrial Development Bank of India (IDBI) caters to the financial needs of the budding industries."
   • This statement is correct. IDBI was established to provide credit and other financial facilities for development purposes in India. It supports industries through various financial products.
2. Reason (R): "Financial constraint is one of the biggest reasons for business failures in entrepreneurship, and there is a need to provide financing support to them."
   • This statement is also correct. Financial constraints significantly challenge new businesses, often limiting their growth and sustainability. Adequate financing support can help overcome these challenges.

Next, we assess whether Reason (R) correctly explains Assertion (A):

• The Reason provided (financial constraints are a major cause of business failure and require financial support) justifies the role of IDBI in providing financial assistance to budding industries. This is because addressing financial constraints is one of the key purposes of IDBI.
• The juxtaposition of both statements clearly indicates that while Assertion (A) identifies IDBI's role in supporting industries, Reason (R) explains why such financial support is crucial for business success, effectively linking the two statements.

Given this analysis, we conclude that both Assertion (A) and Reason (R) are correct, and Reason (R) indeed serves as the correct explanation of Assertion (A).

Thus, the correct option is: Both A and R are correct and R is the correct explanation of A.