Assertion : State Financial Institutions (SFIs) provide developmental finance, that is, finance for investment in fixed assets.

Reasoning: SFIs are also known as 'development banks' or 'development financial institutions as they provide sufficient long-term funds in the desired sectors in accordance with planned priorities to the industrial units and entrepreneurs.

Both, A and R, are true but R is not the correct explanation of A

The correct answer is Option 2: Both, A and R, are true but R is not the correct explanation of A

Assertion : State Financial Institutions (SFIs) provide developmental finance, that is, finance for investment in fixed assets. This is correct.

Reasoning: SFIs are also known as 'development banks' or 'development financial institutions as they provide sufficient long-term funds in the desired sectors in accordance with planned priorities to the industrial units and entrepreneurs. This is also correct.

However, the Reasoning (R) does not directly explain why State Financial Institutions (SFIs) provide developmental finance. While the Reasoning (R) describes the role of SFIs in providing long-term funds to industrial units and entrepreneurs in accordance with planned priorities, it does not explicitly address the rationale behind SFIs focusing on developmental finance.