Rewrite the sentence in direct speech.
Akshai said that he was playing drums.

Correct option is C

The past continuous tense "he was playing drums" in indirect speech is converted to the present continuous "I am playing drums" in direct speech, reflecting an action that was occurring at the time of speaking.
Rule of Conversion: Past continuous in indirect speech becomes present continuous in direct speech when the action is ongoing. Adjust pronouns for direct speech.
Example: He said he was playing -> He said, "I am playing."