Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): India is a popular outsourcing location, which has resulted in a rise in foreign currency reserves.
Reason (R): India's population growth rate makes the country labour cost efficient.

Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)

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

Assertion (A) is true: India has indeed become a popular outsourcing destination for various industries, such as IT, BPO, and pharmaceuticals. This has led to a significant influx of foreign currency into the country, boosting its foreign exchange reserves.

Reason (R) is true: India's large and growing population, combined with a relatively young workforce, makes it a cost-effective destination for outsourcing. The lower labor costs compared to many developed countries are a major attraction for foreign companies.

Therefore, Reason (R) accurately explains why India is a popular outsourcing location and why it has resulted in a rise in foreign currency reserves.