(B) Only I, III and IV are correct.
Political parties play a decisive role in making laws, shape public opinion, and put forward policies and programmes before voters. Making different interest groups is NOT a function of political parties.
Statement II is incorrect — political parties do not make interest groups; interest groups exist independently. The three correct functions (law-making, shaping public opinion, presenting policies/programmes to voters) are standard roles of political parties as described in Chapter 4 of Democratic Politics. Eliminate II to get option (B).