Assertion (A) Private foreign capital lends to flow to the high profit areas rather than to the priority sectors.
Reason (R) One of the important limitations to utilise the foreign capital is the absorptive capacity of the recipient country.

A. Both (A) and (R) are correct and (R) is the correct explanation of (A)

B. Both (A) and (R) are correct, but (R) is not the correct explanation of (A)

C. (A) is correct, but (R) is incorrect

D. (R) is correct, but (A) is incorrect

Answer: Option B