The correct answer is option 'B': Directive Principles of State Policy.

The Union List, State List, and Concurrent List are part of the Seventh Schedule of the Indian Constitution. The Seventh Schedule divides the legislative powers between the Union (central) government and the state governments. It consists of three lists: the Union List, the State List, and the Concurrent List.

1. Union List:
The Union List consists of subjects on which only the central government can make laws. It includes subjects of national importance such as defense, foreign affairs, atomic energy, banking, railways, etc. The Union List contains a total of 100 subjects on which the central government has exclusive jurisdiction.

2. State List:
The State List consists of subjects on which only the state governments can make laws. It includes subjects of local and regional importance such as police, public health, agriculture, land, public order, etc. The State List contains a total of 61 subjects on which the state governments have exclusive jurisdiction.

3. Concurrent List:
The Concurrent List consists of subjects on which both the central government and the state governments can make laws. It includes subjects of shared responsibility such as criminal law, bankruptcy and insolvency, marriage and divorce, bankruptcy and insolvency, education, etc. The Concurrent List contains a total of 52 subjects on which both the central and state governments can make laws.

The Directive Principles of State Policy, on the other hand, are guidelines or principles given to the state governments to be followed while making laws and policies. They are not legally enforceable but serve as a moral and political obligation for the government. The Directive Principles aim to establish social and economic democracy, reduce inequalities, promote the welfare of the people, and secure a just and humane society.

In conclusion, the Union List, State List, and Concurrent List are part of the Seventh Schedule, which deals with the division of legislative powers between the central and state governments. These lists determine the subjects on which laws can be made by each level of government. The Directive Principles of State Policy, on the other hand, are a set of guidelines for the government to follow while making laws and policies.