Statement–Argument — Should state governments retain a major share of central taxes collected in their respective states? Arguments: I. No. The Central Government funds most nationwide development programmes and therefore should receive the major share. II. Yes. Most State Governments face fund shortages and need larger shares to meet their obligations.

Introduction / Context:
Fiscal federalism balances national-equity objectives (central redistributive programs) with state-level autonomy and service delivery. In such questions, opposing arguments can both be strong if each presents a cogent, relevant rationale from its respective vantage point.

Given Data / Assumptions:

• Policy: Let states retain major share of central taxes collected within state borders.
• Arg I (against): Central programs require significant funds; national cohesion and inter-state equalization justify higher central share.
• Arg II (for): States face fiscal stress and need higher shares for health, education, policing, and infrastructure.

Concept / Approach:
Strength is judged by relevance and sufficiency, not by whether the argument supports or opposes the proposal. Both arguments cite legitimate, policy-grounded concerns: national program financing versus state resource adequacy.

Step-by-Step Solution:
1) Arg I: Central schemes (and transfers to poorer regions) need predictable revenue. This is a relevant reason to resist large state retentions. Strong.2) Arg II: States deliver most frontline services; fiscal gaps impede outcomes. This is a direct reason to favor larger state shares. Strong.3) Because both sides provide substantive, non-trivial policy grounds, both are strong.

Verification / Alternative check:
Real-world finance commissions mediate precisely these tensions, indicating both sides are material considerations.

Why Other Options Are Wrong:
Choosing only one ignores the legitimate competing objective on the other side; “neither” denies the salience of both concerns.

Common Pitfalls:
Treating mutually opposing but well-reasoned claims as if only one can be strong in standardized reasoning contexts.

Final Answer:
If both I and II are strong.