Statement I is correct: Varanasi (Kashi) was a renowned ancient centre of learning where learned Brahmins (Gurus) traditionally imparted education in Pathshalas, often based on a structured system of studying scriptures and various disciplines. Statement III is incorrect: Education in Varanasi was not restricted to theology alone. While religious and philosophical studies (like Vedanta, Mimamsa, Nyaya) were central, other subjects like Sanskrit grammar, astronomy, astrology, law (Dharmashastra), and literature were also taught. Statement II is likely considered correct in this context, implying that while private schools and individual gurus flourished, large-scale 'public educational institutes' resembling modern universities or the large monastic universities found elsewhere (like Nalanda) were not the primary characteristic of Varanasi's ancient educational landscape. Education was more decentralized and guru-centric.