Statement — In the Union Budget 2000–01, defence allocation was raised to Rs 58,587 crore from Rs 45,694 crore. Conclusions: I. The Government is paying greater attention to national security. II. The difference in allocation is due to inflation.

Introduction / Context:Budget movements often signal policy priorities. The question asks which conclusions are compelled by the single data point that defence spending rose substantially year-over-year.

Given Data / Assumptions:

• Defence allocation increased from Rs 45,694 cr to Rs 58,587 cr.
• No other factors (inflation rate, exchange rate, new programs) are provided.

Concept / Approach:An increase in a specific head commonly indicates added focus; hence I is a reasonable inference. However, attributing the increase specifically to “inflation” requires additional macro data not in the statement, so II does not follow.

Step-by-Step Solution:1) Recognize that targeted allocation growth → greater attention to that sector.2) Note the absence of inflation data; causation cannot be assigned.

Verification / Alternative check:Even if inflation were low or high, the conclusion about priority remains; therefore I stands independently.

Why Other Options Are Wrong:Only II/Either/Both: require unsupported inflation claims. Neither: ignores the plain policy signal of an increased allocation.

Common Pitfalls:Confusing correlation (spend up) with an unverified cause (inflation).

Final Answer:Only conclusion I follows.