Read the following statements - Assertion (A) and Reason (R):
Assertion: Expenditure on health is an important source of human capital formation.
Reasoning: A sick labourer without access to medical facilities is compelled to abstain from work.
From the given alternatives choose the correct one:

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

The correct answer is option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Here's a breakdown:

• Assertion (A): This is correct. Expenditure on health is an important source of human capital formation. Healthy individuals are more productive and can contribute more effectively to the economy.
• Reason (R): This is also correct and provides a clear explanation for the assertion. A sick laborer who cannot access medical facilities is forced to abstain from work, which reduces their productivity and earning potential. This, in turn, negatively impacts human capital formation.

Therefore, the reason for the assertion lies in the fact that health is essential for individuals to participate fully in the workforce and contribute to economic growth.