Assertion (A): In 1991 Government decided to allow all foreign investments to any industry without any restrictions. Reason (R): Government has enhanced the investment limit of small scale industrial units.

The correct answer is: B. Both (A) and (R) are true but (R) is not the correct explanation of (A).

Assertion (A) is true. In 1991, the Government of India announced a series of economic reforms, known as the New Economic Policy (NEP). One of the key elements of the NEP was the liberalization of foreign investment. The NEP allowed foreign companies to invest in India without any restrictions, except in a few sensitive sectors.

Reason (R) is also true. The Government of India did enhance the investment limit of small scale industrial units in 1991. However, this was not done as a result of the NEP. The investment limit for small scale industrial units was enhanced to promote entrepreneurship and to encourage the growth of small and medium enterprises.

While both (A) and (R) are true, (R) is not the correct explanation of (A). The NEP did not lead to an increase in the investment limit for small scale industrial units. The increase in the investment limit was a separate policy decision that was taken by the Government of India.

The following are the explanations of each option:

• Option A: Both (A) and (R) are true and (R) is the correct explanation of (A). This option is incorrect because (R) is not the correct explanation of (A).
• Option B: Both (A) and (R) are true but (R) is not the correct explanation of (A). This option is correct because both (A) and (R) are true, but (R) is not the correct explanation of (A).
• Option C: (A) is true but (R) is false. This option is incorrect because (R) is true.
• Option D: (A) is false but (R) is true. This option is incorrect because (A) is true.