Correct option is A
The statement indicates an increase in school dropout rates in drought-affected states.
Assumption 2 states: "School attendance in India increases when children are not required to spend hours collecting water." This assumption is implicit because it provides a plausible reason for the reverse phenomenon (dropout rates increasing when drought makes water collection time-consuming). The statement's author likely assumes a connection between water availability and school attendance/dropout rates.
Assumption 1 states: "Clean water and sanitation facilities in schools keep children away from schools." This assumption directly contradicts the likely intended meaning of the statement and common knowledge, which posits that such facilities improve attendance. Therefore, it is not implicit.