The correct options are
B Establishment of parallel authority.
C Failure of democratic system.
After its initial streak of revolutionary idealism, the Naxalites strayed towards terrorism tol prevent government schemes from reaching the common people. There was a threat of the failure of democratic government in India and the establishment of parallel authority in some areas. That is why, Naxalism has become a threat to the country.
A communist government by itself may not be a great threat to the Indian democracy.