Explanation:

First option is correct.

In order to improvise the working of Gram Panchayats in Haryana the Hon’ble Chief Minister,  has launched 7-Star Panchayat Rainbow Scheme on the occasion of Republic day i.e.26th January 2018 with a view to scale up the coverage of the ranking exercise and encourage GPs to actively implement the scheme in a timely and innovative manner.
Under the scheme the best performing selected Gram Panchayat from each district will be identified and would be rewarded and incentivised. Such GPs will be recognised as “Indradhanush Gram Panchayats” who scores maximum in seven parameters fixed by the department including sex ratio, education (Zero dropouts or minimum dropouts), hygiene, peace and harmony (no litigation or minimum litigation), environment preservation, good governance and social participation.

Pink star would be given to such panchayats which work best in improving the sex ratio, green star for protection of environment, white star for cleanliness, saffron star for crime-free GPs or social harmony, golden star for good governanance and silver star would be given for participation in the development of the villages.