Assertion (A): Make in India campaign initiated by the government lead...
Assertion (A): Make in India campaign initiated by the government leads to a rise in foreign exchange rate.
Reason (R): Inflow of foreign exchange improves the trade deficit of the country.
To understand the given assertion and reason, let's analyze each statement separately:
Assertion (A): Make in India campaign initiated by the government leads to a rise in foreign exchange rate.
The Make in India campaign is an initiative launched by the Government of India to promote manufacturing in India and attract foreign direct investment (FDI). The aim is to make India a global manufacturing hub and increase exports. The assertion states that this campaign leads to a rise in the foreign exchange rate.
Reason (R): Inflow of foreign exchange improves the trade deficit of the country.
Trade deficit refers to the difference between a country's exports and imports. If the value of imports is higher than the value of exports, the country has a trade deficit. The reason states that the inflow of foreign exchange improves the trade deficit of the country.
Explanation:
The assertion and reason are related to the impact of the Make in India campaign on the foreign exchange rate and trade deficit. However, they are not logically connected, and the reason does not provide a valid explanation for the assertion.
The Make in India campaign aims to increase manufacturing and exports, which can lead to an increase in foreign exchange earnings. When a country exports more goods, it receives payments in foreign currency, which increases its foreign exchange reserves. However, this does not necessarily lead to a rise in the foreign exchange rate.
The foreign exchange rate is determined by various factors such as supply and demand for a currency in the foreign exchange market, interest rates, inflation, and economic indicators. While an increase in foreign exchange earnings can contribute to a stronger currency, it is not the sole determinant of the exchange rate.
Similarly, the reason provided does not explain how the inflow of foreign exchange improves the trade deficit. The trade deficit is improved when a country's exports increase or imports decrease. The reason does not mention how the inflow of foreign exchange directly leads to a decrease in imports or an increase in exports.
Therefore, the correct answer is option 'C' - Assertion (A) is false, but Reason (R) is true. The reason does not provide a valid explanation for the assertion.
Assertion (A): Make in India campaign initiated by the government lead...
Make in India Campaign leads to inflow of foreign currency. With inflow of foreign currency, supply of foreign exchange increases which further leads to fall in exchange rate.