The correct option is D
fringe width decreases, and central bright fringe does not shift
There is no shift in central maxima, but fringe width decreases because,
Fringe Width =λDd
Since, μ(>1) is the refractive index of water, then wavelength reduces by μ factor
New fringe width β′=λDμd
Therefore in water, fringe width decreases, but there would be no lateral shift in fringe pattern due to the absence of a sheet.