Several things make statement 1 a judgment – 'should not be', 'hopelessly addicted', 'erroneous belief', and ‘crookedness of Indians’; none of them are facts, nor verifiable inferences.
Statement 2 is a combination of inference and facts. ‘we have more red tape’ is an inference, but "the truth is" clarifies that the author takes it for granted as there is more red tape and sites an example ‘we take 89 days etc...” which is a fact. The author is not drawing the conclusion from the statistical example, but after confirming we have more red tape just giving an example. Since the thrust of the statement is based on the facts it has to be classified as a fact. Therefore options C and D are eliminated.
Options A, B and E remain. Statement C is classified in both options B and E as a Judgement. and surely this is a personal opinion.Distortion of personal character is a subjective opinion.
Statement D is to be evaluated a Judgement or an Inference. The first part of sentence D is a fact. In the second part, ‘potential’ is inferred based on facts/experiences. Hence it is an inference. This eliminates options A and B.
Hence, the correct answer is option E.