In the question a statement is given, followed by two arguments, I and II. You have to consider the statement to be true even if it seems to be at variance from commonly known facts. You have to decide which of the given arguments, if any, is a strong argument.
Statement : Should prison term of those criminals who have shown good behaviour be reduced?
Argument I : No, if they are freed they will again commit crimes.
Argument II : Yes, this will incentivise others to show good behaviour.
Prison term of those criminals who have shown good behavior be reduced.
It will encourage other criminal to show or be of good behavior.
$$\therefore$$ The correct answer is option D.
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