The correct option is
D Gaurav told Saurabh that he was not taking the examination because he was not very confident about his studies.
When we're reporting a speech, we're narrating things that happened
or were said in the past. So, the speech will go one tense back.
In
reported speech, we add a reporting verb (usually 'said'), the subject
changes in narration ('he', 'she' or 'they') and the related words also
change.
Option D: For reporting the speech here, 'I'
changes to 'he'. 'Am not taking' is in the present continuous, it changes to 'was not taking', the past continuous, 'am not' will change to 'was not'.
So, the corrected reported speech for the sentence "I am not taking the examination because I am not very confident about my studies." is:
'Gaurav told Saurabh that he was not taking the examination because he was not very confident about his studies.'
Hence option D is correct.
Option A: 'Has not been taking' is in the present perfect continuous tense, whereas the tense should be past continuous.
Option B: Similarly, here too the tense has not been changed correctly.
Option C: 'I' has not been changed to 'he', and the tense of both verb forms have not been changed. Only the inverted commas have been eliminated.
Hence these options A, B and C are incorrect.