Correct Answer: 1996

Solution : The amount invested in raw materials in 1996 = Rs. 225 lakhs
The amount invested in raw materials in 1995 = Rs. 120 lakhs
Increase = 225 – 120 = Rs. 105 lakhs
In Year 1996,
Percentage increase = $\frac{\text{Increase}}{\text{Amount invested in raw material 1995}}$
= $\frac{105}{120}\times100$
= 87.5%
The amount invested in raw materials in 1996 = Rs. 225 lakhs
The amount invested in raw materials in 1997 = Rs. 375 lakhs
Increase = 375 - 225 = Rs. 150 lakhs
In Year 1997,
Percentage increase = $\frac{\text{Increase}}{\text{Amount invested in raw material 1996}}$
= $\frac{150}{225}\times100$
= 67%
Hence, the correct answer is 1996.