The correct answer is State List. Panchayati Raj is included in the State list. Panchayati Raj (Council of five officials) is the system of local self-government of villages in rural India as opposed to urban and suburban municipalities.

The Unitary System of Government, where power is concentrated at the central level, ensures uniformity, efficiency, and quick decision-making in governance. This system allows for streamlined implementation of policies and laws without regional variations, leading to administrative simplicity. However, the Directive Principles of State Policy, while essential, are distinct principles in the Indian Constitution, guiding social and economic policies, irrespective of the system of government in place.

The Constituent Assembly of India was constituted based on the Cabinet Mission Plan of 1946. The plan was proposed by the British government and aimed at devising a constitutional framework for India's independence. It laid the foundation for the formation of the Constituent Assembly, which played a crucial role in drafting the Constitution of India, ultimately leading to India's independence in 1947.

The Government of India Act, 1935 was based on the principle of federation and introduced a parliamentary system of government. It provided for the establishment of a federal structure for India, where powers were divided between the central (federal) government and provincial governments. It also introduced the concept of bicameralism at the federal level and established a parliamentary system, laying the foundation for India's governance until it gained independence in 1947.

Pandit Jawaharlal Nehru moved the Objective Resolution in the Constituent Assembly of India on December 13, 1946. The Objective Resolution laid the foundation for the Preamble of the Constitution of India and outlined the fundamental principles that would guide the framing of the Indian Constitution.

The statement "Army" is incorrect. The army is, in fact, an essential element of the State. The elements of the State typically include population, territory, government, and sovereignty. The army, or the military, is part of the government's structure and is responsible for national defense, making it a crucial component of the State apparatus.

both statements are individually true, and statement II is the correct explanation of statement I. The Constitution of India is indeed a liberal Constitution, emphasizing democratic values, individual rights, and freedoms. Statement II clarifies that it achieves this liberal character by providing Fundamental Rights to individuals, which are essential elements of a liberal democratic framework, ensuring citizens' liberties and equal protection under the law.

India is a republic because the head of the state, the President, is elected by an electoral college for a fixed term of five years. This democratic process ensures that the highest office in the country is not hereditary but held through periodic elections, reflecting the nation's commitment to representative governance and equality.