The correct answer is: Only II follows.
The statement says that a large number of students who have passed their XII Std. terminal examination in the country could not get admission to colleges as the number of seats available are grossly inadequate.
Course of Action I says that the evaluation system of XII Std. terminal examination should be made more tough so that fewer students pass the examination. This course of action is not appropriate because it will not solve the problem of lack of seats in colleges. In fact, it will make the problem worse because it will mean that even fewer students will be able to get admission to colleges.
Course of Action II says that the Government should encourage the private sector to open new colleges by providing them land at cheaper rate. This course of action is appropriate because it will increase the number of seats available in colleges. This will help to solve the problem of lack of seats in colleges.
Course of Action III says that the rich people should be asked to send their wards to foreign countries for higher studies enabling the needy students to get admission in colleges within the country. This course of action is not appropriate because it is unfair to the rich people. It is also not practical because not all rich people can afford to send their wards to foreign countries for higher studies.
Therefore, the only course of action that follows is II.