To address the given problem, we will analyze both the Assertion (A) and the Reason (R) and determine their individual correctness and the relationship between them.

1. Assertion (A): "The small engraved area in letters like 'A', 'B' and 'O' are difficult to tablet manufacture cleanly."
   • This assertion is true. In the pharmaceutical industry, tablets are manufactured using punches that have indentations to form letters or symbols on tablets. Small and intricate engravings, like those in the inner parts of letters 'A', 'B', 'O', etc., can create challenges during the tablet manufacturing process. These challenges arise due to the difficulty in clean removal from the mold, potentially leading to defects such as 'picking' (where parts of the material adhere to the punch).
2. Reason (R): "Because tablet punches having engraving exhibit picking problem in compression."
   • This reason is true. Picking is a common issue when engravings or embossed designs are present on the punch face. During the compression process, material sticking to the punch surface can lead to incomplete or defective tablets.

Upon evaluating both statements:

• Both Assertion (A) and Reason (R) are correct statements. Picking problems, as mentioned in the Reason, directly cause difficulties in manufacturing tablets with small engravings cleanly.
• Reason (R) correctly explains why the problem mentioned in Assertion (A) occurs.

Therefore, the correct option is: Both A and R are correct and R is the correct explanation of A.