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

Assertion: Health expenditure is a source of human capital formation.

Reasoning: Health expenditure indirectly increases the supply of healthy labour force.

Assertion (A) is true but Reasoning (R) is not correct.

The amount of money spent on preventive medicine (vaccination), curative medicine (medical intervention during illness), social medicine (spread of health literacy) and provision of clean drinking water and good sanitation are the various forms of health expenditures. Health expenditure directly increases the supply of healthy labour force and is, thus, a source of human capital formation.