Statements: A. ITC, a tobacco company, has decided to withdraw from all sponsorship of sporting activities. B. The central Government has decided to introduce legislation banning sponsorship of sports and cultural events by tobacco companies.

Introduction / Context:
This cause and effect question is based on corporate behaviour and government regulation. Statement A reports that ITC, a tobacco company, has voluntarily decided to withdraw from sponsoring sports. Statement B reports that the central Government plans to pass a law banning tobacco companies from sponsoring sports and cultural events. We must decide which is the cause and which is the effect, or whether they share some other relation.

Given Data / Assumptions:

• Statement A: ITC withdraws from all sponsorship of sporting activities.
• Statement B: The Government has decided to bring in legislation to ban sponsorship of sports and cultural events by tobacco companies.
• We assume companies respond to regulations and anticipated legal changes to manage their image and compliance.
• No additional hidden events are given in the question.

Concept / Approach:
In regulatory contexts, a typical sequence is: the Government announces or plans a law against a certain practice, and then companies affected by that law adjust their behaviour accordingly. Therefore, the Government's decision tends to be the cause, and the company's withdrawal becomes the effect. We test this direction and verify that the reverse direction is less logical.

Step-by-Step Solution:
1. Analyse Statement B: the Government decides to introduce a ban on tobacco sponsorship in sports and cultural events.2. Such proposed legislation would make it illegal or very difficult for tobacco companies to continue sponsoring these events.3. ITC, anticipating the law and wanting to appear responsible or avoid conflict, decides to withdraw from sports sponsorship.4. Therefore, Statement B provides a clear reason or cause for ITC's decision described in Statement A.5. Hence, A is the effect and B is the immediate and principal cause.

Verification / Alternative check:
Consider the reverse ordering. If Statement A were the cause and Statement B the effect, it would mean that ITC's voluntary withdrawal alone caused the central Government to legislate against all tobacco sponsorships. This is unlikely: governments usually do not create national laws based on the action of a single company that is already complying with the desired behaviour. Laws are typically introduced to restrict non compliant companies. Therefore, the more realistic sequence is that the threat or certainty of a ban (Statement B) pushed ITC to act (Statement A).

Why Other Options Are Wrong:
A is the immediate and principal cause and B is its effect: This reverses the realistic direction of regulatory influence.Both are effects of some common cause: There is no need to assume an extra hidden cause because the Government decision directly explains the company's behaviour.Neither is related: This ignores the obvious link between a proposed ban and withdrawal from sponsorship.Independent causes: Again, this would be possible only if they were unrelated, which contradicts the natural policy compliance link.

Common Pitfalls:
Sometimes candidates misinterpret the time order, thinking that if a company acts first, the Government will react later. However, the question wording suggests the Government has decided to legislate, which is a strong, formal step. Even if announcements are close in time, the Government's decision still logically explains why ITC withdraws sponsorship. Always favour the direction where legal or regulatory actions influence corporate behaviour, not the other way around in such questions.

Final Answer:
A is the effect and B is its immediate and principal cause.