Statement: The quality of primary education in government schools has been a cause for concern, as many students are failing to achieve basic literacy and numeracy skills.

Assumptions:
I. Private schools provide better primary education.
II. The government has the resources and capability to improve the quality of education in its schools.

The statement highlights a problem: the quality of primary education in government schools is poor, and many students are failing to acquire basic literacy and numeracy skills. It does not, however, make any comparison with private schools, nor does it imply that private schools offer better education. Therefore, assumption I is not implicit. 

Similarly, the statement does not assume that the government necessarily has the resources or ability to improve the situation; it merely identifies the issue. The possibility of government action is not mentioned or suggested. Hence, assumption II is also not implicit. The statement confines itself to expressing concern about the present state of affairs without implying either assumption.

So, the correct choice would be option D: Neither I nor II is implicit