Statement: Government has spoiled many top-ranking financial institutions by appointing bureaucrats as Directors of these institutions. Conclusions: a) Government should appoint Directors of financial institutions by considering the expertise of the person in the area of finance. b) The Director of a financial institution should have expertise commensurate with the financial work carried out by the institution.

Introduction / Context:
This statement-and-conclusion item concerns appointments to top-ranking financial institutions. The statement criticises the government for appointing bureaucrats as Directors and indicates that this has spoiled these institutions. You must decide whether the suggested conclusions about how Directors should be chosen logically follow from this criticism.

Given Data / Assumptions:

Statement: Government has spoiled many top-ranking financial institutions by appointing bureaucrats as Directors.
The implication is that these bureaucrats lack the specialised financial expertise needed for such roles, leading to poor institutional performance.
Conclusion a: Government should appoint Directors based on their expertise in finance.
Conclusion b: Directors of financial institutions should have expertise matching the financial work done by the institution.

Concept / Approach:
The key idea is to see what corrective principle naturally follows from the criticism. If a specific practice (appointing bureaucrats without relevant expertise) is blamed for spoiling institutions, it is reasonable to conclude that appointments should instead be based on relevant expertise. Both conclusions are essentially restatements of that underlying principle with slightly different wording and focus.

Step-by-Step Solution:
The statement links the decline of top-ranking financial institutions directly to the government's practice of appointing bureaucrats as Directors. Bureaucrats typically have general administrative experience, not specialised financial expertise. Therefore, the criticism suggests that lack of domain expertise at the Director level is harmful to financial institutions. Conclusion a says that the government should appoint Directors based on their expertise in finance. This is a natural corrective recommendation: if appointing non-finance bureaucrats spoils institutions, appointing finance experts is an obvious remedy. So conclusion a follows. Conclusion b further refines this idea by specifying that the Director's expertise should be commensurate with the financial work of the institution. This aligns with the same underlying reasoning: matching expertise to responsibility helps prevent the damage described in the statement. Thus b also follows. Both conclusions are consistent with each other and with the criticism in the original statement; they are not contradictory or independent, but two forms of the same idea: appointments should be based on appropriate financial expertise, not merely bureaucratic status.

Verification / Alternative check:
If the problem with the current appointments is the lack of relevant expertise, then any conclusion that insists on relevant expertise for future appointments logically supports the implied solution. Neither a nor b introduces a new, unrelated idea; both directly address the root problem identified. Therefore, accepting the statement as true naturally leads to endorsing both conclusions.

Why Other Options Are Wrong:
Choosing only a or only b is too restrictive, because both are equally supported by the statement's criticism. Saying neither follows contradicts the obvious link between spoiled institutions and non-expert leadership. The option that says only one conclusion follows but cannot be identified is not applicable here, since both clearly rest on the same reasoning.

Common Pitfalls:
Some candidates may think that because the statement does not explicitly mention “expertise”, conclusions involving expertise are assumptions. However, the context of “spoiled” institutions due to bureaucratic appointments strongly implies that the main issue is mismatch between skills and responsibilities. Recognising this implied cause–effect relationship is crucial in such reasoning questions.

Final Answer:
Both conclusion a and conclusion b follow logically from the given statement. The correct option is Both conclusion a and conclusion b follow.