Explanation:

Explain 

In the statements given, while the statement I mentions a decision taken by the government, the statement II describes its effect on the economy. Applying the elimination technique, let’s check the relevance of each of the options one by one.
 
Possibility 1:
 
With a view to imparting a fillip to consumption demand and economic growth, the Cabinet has decided to raise salaries and pensions for more than one crore government employees and pensioners by implementing the Seventh Pay Commission’s recommendations.
 
Though the above synthesis is grammatically correct, it would imply an absurd meaning, if comprehended. A government is least likely to raise salaries of its employees with a view to creating an economic growth. 
 
Possibility 2:
 
The Cabinet’s decision to raise salaries and pensions for more than one crore government employees and pensioners by implementing the Seventh Pay Commission’s recommendations will impart a fillip to consumption demand and economic growth.
 
Clearly, the above synthesis is also both grammatically and contextually correct. This eliminates option B as well.
 
Possibility 3:
 
Whereas the decision will impart a fillip to consumption demand and economic growth,the Cabinet has decided to raise salaries and pensions for more than one crore government employees and pensioners by implementing the Seventh Pay Commission’s recommendations.
 
Or
 
Whereas the decision by the Cabinet to raise salaries and pensions for more than one crore government employees and pensioners by implementing the Seventh Pay Commission’s recommendations, it will impart a fillip to consumption demand and economic growth.
 
We can observe that neither of the above two sentences constructs a meaningful synthesis.
 
Clearly, option A is the correct answer.