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Assertion (A) : The Union Budget for 2010-11 had begun the process of fiscal consolidation with a partial withdrawal of the stimulus measures.

Reason (R) : There was a clear evidence of economic recovery in the economy.
In the context of the above two statements, which one is correct from the given codes ?

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

The key takes both statements as correct, with the reason explaining the assertion. The Union Budget for 2010-11 started the process of fiscal consolidation by partly withdrawing the stimulus given in the previous two years, and it was able to do so because the economy was showing clear signs of recovery. So the reason is the cause of the assertion, and option A is right. Option B is wrong because R is the explanation. Options C and D are wrong because both statements are true.

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