Statement–Assumption — “The government has decided to disinvest a large chunk of its equity in select public sector undertakings (PSUs) for better fiscal management.” Assumptions: I. Proceeds from disinvestment may substantially reduce the mounting fiscal deficit. II. There will be adequate market demand for these PSU shares at acceptable prices.

Introduction / Context:
Disinvestment is proposed as a tool for “better fiscal management,” typically to raise non-tax revenue and improve fiscal indicators. We must isolate the necessary premises.

Given Data / Assumptions:

• Government plans to sell equity stakes.
• Objectives include revenue generation and fiscal correction.
• Successful sale requires willing buyers at viable prices.

Concept / Approach:
The policy logic depends on two pillars: (a) that sale proceeds can help reduce fiscal pressure (deficit or debt metrics), and (b) that there is sufficient investor demand to realize those proceeds. If either premise fails, the stated purpose (better fiscal management via disinvestment) would not be met.

Step-by-Step Solution:
1) I is implicit: without deficit impact, calling it “better fiscal management” would be hollow.2) II is implicit: absent market demand, the plan would not raise meaningful revenue, undermining the approach.

Verification / Alternative check:
Privatization/disinvestment programs globally hinge on market absorption and pricing to achieve fiscal outcomes.

Why Other Options Are Wrong:
I-only or II-only omit a critical dependency; “neither” contradicts the rationale of the move.

Common Pitfalls:
Ignoring market conditions as a constraint on fiscal strategy efficacy.

Final Answer:
if both I and II is implicit.