There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion: There is existence of both private and public institutions in the education and health service markets in India.
Reasoning: Education and health care services create both private and social benefits.

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

Education and health care services create both private and social benefits and this is the reason for the existence of both private and public institutions in the education and health service markets. Expenditures on education and health make substantial long-term impact and they cannot be easily reversed; hence, government intervention is essential. For instance, once a child is admitted to a school or health care centre where the required services are not provided, before the decision is taken to shift the child to another institution, substantial amount of damage would have been done. Moreover, individual consumers of these services do not have complete information about the quality of services and their costs. In this situation, the providers of education and health services acquire monopoly power and are involved in exploitation. The role of government in this situation is to ensure that the private providers of these services adhere to the standards stipulated by the government and charge the correct price.