This is a current affairs question built on the 2012 Haj subsidy ruling. Answering it needs one fact about what the court ordered and one about the wider point made in the debate around it.
Take statement I first. The 2012 judgment in Union of India v. Rafique Shaikh Bhikan directed that the Haj subsidy be gradually reduced and completely wiped out within ten years, with the court suggesting the money be redirected to education and social development. The bench was Justice Aftab Alam and Justice Ranjana Prakash Desai, not Justice Katju and Justice Gyan Sudha Misra. Both halves of statement I are therefore off: the composition of the bench and, more importantly, the claim that the subsidy was upheld. An order to phase something out over a decade is the opposite of an endorsement.
Statement II is sound. Government support for pilgrimage has never been limited to one religion. The Kailash Mansarovar Yatra receives subsidy, State governments spend on pilgrim facilities at Hindu religious sites, and public money supports temple administration and fairs. Whatever view one takes of the policy, the factual claim that Hindus too have received substantial financial support from the Government holds up.
Let's summarize:
Option (B) is the answer.