Statement — The Centre is disinvesting in profit-making PSUs to meet its deficit; this is wrong. Conclusions: I. The Centre should disinvest only in loss-making PSUs. II. The Centre has a surplus.

Introduction / Context:The statement critiques the choice (disinvesting profit-making PSUs) and the motive (to meet deficit). It does not prescribe an alternative or claim a surplus exists.

Given Data / Assumptions:

• There is a deficit (hence the motive).
• Disinvestment target: profit-making PSUs; author says this is wrong.
• No assertion about the status of loss-making PSUs.

Concept / Approach:Conclusion I adds an unstated prescription (“should disinvest loss-making PSUs”). The criticism of one path is not endorsement of another. Conclusion II contradicts the stated deficit.

Step-by-Step Solution:1) Note contradiction: “deficit” → not surplus.2) Absence of positive recommendation → cannot infer I.

Why Other Options Are Wrong:Any option that admits I or II reads beyond the text.

Common Pitfalls:Assuming the opposite policy must be the preferred one; the statement only says current policy is wrong.

Final Answer:Neither I nor II follows.