Solution:Article 16 (4) of the Constitution enables States to make any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.However, the Supreme Court of India has consistently referred to the notions of "efficiency" and "merit," while adjudicating the validity of various reservation policies.
The Court has held in several judgments, such as Indra Sawhney Vs Union of India 1993 and M Nagaraj Vs Union of India 2006, that the reservation policies made under Article 16(4) of the Constitution have to be interpreted in the background of Art. 335 which provides for "maintenance of efficiency of administration," while making appointments to services and posts in connection with the affairs of the Union or of a State.
Article 335 states that the claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State.
This Article has, however, not defined the expression 'efficiency of administration'. Hence, statement I is correct but statement II is incorrect.