The correct answer is: Only I and III are strong.
Argument I is strong because it is based on the idea that a hire and fire policy will help public sector undertakings to get rid of non-performing employees and reward the performing employees. This is a valid reason for adopting a hire and fire policy, as it will help to improve the efficiency of these organizations.
Argument II is weak because it is based on the idea that a hire and fire policy will give an unjust handle to the management and they may use it indiscriminately. This is a possible risk of adopting a hire and fire policy, but it is not a strong argument against it. The management of public sector undertakings should be held accountable for their use of a hire and fire policy, and there should be safeguards in place to prevent its indiscriminate use.
Argument III is strong because it is based on the idea that a hire and fire policy will help increase the level of efficiency of these organizations and these will become profitable establishments. This is a valid reason for adopting a hire and fire policy, as it will help to improve the performance of these organizations.
Therefore, only arguments I and III are strong.