Step 1: Statement I: Following the Balwantrai Mehta Committee (1957) recommendations, Rajasthan became the first state to adopt the three-tier system (Gram Panchayat, Panchayat Samiti, Zila Parishad). Statement I is correct. Step 2: Statement II: Prime Minister Jawaharlal Nehru inaugurated it at Bagdari village in Nagaur district on 2 October 1959. Statement II is correct. Step 3: Andhra Pradesh adopted it soon after, on 11 October 1959, but Rajasthan was the first. Answer: Both I and II.