The correct answer is option 1, Andhra Pradesh and Rajasthan. The Panchayati Raj System was implemented for the first time in these two states. Panchayati Raj System is a system of local self-government in rural areas of India. It aims to decentralize power and administration in order to provide better governance at the grassroots level. The system involves the establishment of Panchayats, which are elected bodies responsible for local governance and decision-making. Andhra Pradesh and Rajasthan were the first states to implement this system, which was later adopted by other states across the country. It is important to note that while the implementation of Panchayati Raj System may have varied in terms of timing and structure in different states, Andhra Pradesh and Rajasthan were the pioneers in initiating this system in India.