Disinvestment of equity in Central Public Sector Enterprises (CPSEs) by the Government of India is a strategic move that aims to achieve certain objectives. Let's analyze the given statements and understand why option D, which states neither 1 nor 2, is the correct answer.

1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt:
- This statement is not entirely correct. While the revenue earned from disinvestment can contribute to reducing the debt burden, it is not the sole purpose. The government may utilize the funds for various purposes like infrastructure development, social welfare programs, bridging fiscal deficits, etc. Therefore, this statement is incorrect.

2. The Government no longer intends to retain the management control of the CPSEs:
- This statement is also incorrect. Disinvestment does not necessarily mean relinquishing management control. The government may opt for various models of disinvestment, such as strategic disinvestment or minority stake sale, where it retains significant management control. The decision to retain management control depends on the specific circumstances and objectives of each disinvestment case.

Reasoning:
The disinvestment of equity in CPSEs by the Government of India is driven by multiple factors and objectives, including:

1. Revenue generation:
- Disinvestment helps the government raise funds by selling its stake in CPSEs to private investors. These funds can be utilized for various purposes, including reducing fiscal deficits, financing infrastructure projects, or investing in social welfare programs.

2. Unlocking the value of assets:
- By diluting its equity in CPSEs, the government allows private investors to participate in the growth and development of these enterprises. This can lead to improved efficiency, technological upgradation, and better utilization of resources, which may ultimately enhance the value of these entities.

3. Market competition and efficiency:
- Disinvestment promotes market competition by reducing the dominance of the government in certain sectors. Private participation can bring in new ideas, management practices, and technologies, leading to improved efficiency and productivity.

4. Promoting inclusive growth:
- Disinvestment can result in the democratization of wealth creation by allowing a wider section of society to participate in the ownership of enterprises. This can help in achieving inclusive growth and reducing income inequalities.

In conclusion, the disinvestment of equity in CPSEs by the Government of India is driven by various objectives, including revenue generation, unlocking asset value, promoting market competition, and ensuring inclusive growth. The given statements, however, do not accurately represent the reasons behind the disinvestment process, hence option D is the correct answer.