Read the passage and answer the question:

As the global demand for steel increases, Orissa, which has one of the largest reserves of untapped iron ore in the country, is being seen as an important investment destination. The State government hopes to cash in on this unprecedented demand for iron ore and has signed Memorandum of Understanding (MoU) with both international and domestic steel makers. The government believes that this would bring in necessary capital investment and proivde a lot of employment opportunities. The iron ore resources lie in some of the most underdeveloped and predominantly tribal districts of the state.

Assertion: The central government was in favor of setting up industries in Orissa.
Reason: The central government feels that if the industry is not allowed it would set a bad example and discourage investments in the country.

Both the Assertion and the Reason are correct and the Reason is the correct explanation of the Assertion.

The correct answer is Option 1 - Both the Assertion and the Reason are correct and the Reason is the correct explanation of the Assertion.

Assertion: The central government was in favor of setting up industries in Orissa.
Reason: The central government feels that if the industry is not allowed it would set a bad example and discourage investments in the country.

The reason given suggests that the central government views allowing industry in Orissa as crucial for setting a positive precedent and attracting investments nationally. This aligns with the government's stance on promoting industrialization for economic development.
Therefore, both the assertion and reason appear to be logical and consistent with the general approach of the central government towards industrial policy.

As the global demand for steel increases, Orissa, which has one of the largest reserves of untapped iron ore in the country, is being seen as an important investment destination. The State government hopes to cash in on this unprecedented demand for iron ore and has signed Memorandum of Understanding (MoU) with both international and domestic steel makers. The government believes that this would bring in necessary capital investment and proivde a lot of employment opportunities. The iron ore resources lie in some of the most underdeveloped and predominantly tribal districts of the state.

The tribal population fears that the setting up of industries would mean displacement from their home and livelihood. The environmentalists fear that mining and industry would pollute the environment. The central government feels that if the industry is not allowed it would set a bad example and discourage investments in the country.