C) Only I, II and IV are correct.
The textbook states: "the formation of linguistic States has actually made the country more united. It has also made administration easier." Statement III is incorrect; linguistic States strengthened, not weakened, the federal structure.
Source: How is federalism practised?, Linguistic States section, Chapter 2.
Statement III is the trap option — the passage clearly says linguistic States made the country more united, not weaker. Statements I and II are directly quoted in the source. Statement IV (development of Indian languages) is supported by the overall context of linguistic recognition. Eliminate III to arrive at option C.