Directions : In each of the following questions a statement is given, followed by two conclusions. Give answer : Statement : The government has decided to disinvest large chunk of its equity in select public sector undertakings for a better fiscal management. Assumptions : I. The amount generated out of the disinvestment process may reduce substantially the mounting fiscal deficits. II. There will be enough demand in the market for the shares of these undertakings.

The correct answer is: E. Both I and II are implicit.

The statement says that the government has decided to disinvest large chunk of its equity in select public sector undertakings for a better fiscal management. This means that the government is trying to reduce its fiscal deficit by selling its shares in these companies.

Assumption I is that the amount generated out of the disinvestment process may reduce substantially the mounting fiscal deficits. This is a reasonable assumption, as the government will receive a large amount of money from the sale of its shares. This money can then be used to reduce the fiscal deficit.

Assumption II is that there will be enough demand in the market for the shares of these undertakings. This is also a reasonable assumption, as these companies are likely to be profitable and their shares are likely to be in demand.

Therefore, both assumptions I and II are implicit in the statement.