Correct Answer:
B. He said that he was busy
When converting direct speech to indirect (or reported) speech, several changes typically occur, especially when the reporting verb (like "said") is in the past tense. This is known as 'backshift' of tenses.
- Reporting Verb: "He said" remains the same.
- Conjunction: We usually add "that" to introduce the reported statement, though it's often optional.
- Pronoun Change: The pronoun "I" in direct speech refers to the original speaker (He), so it changes to "he" in indirect speech.
- Tense Change (Backshift): The present simple tense "am busy" in direct speech shifts one step back to the past simple tense in indirect speech. So, "am" becomes "was."
Applying these rules, "He said, 'I am busy'" transforms into "He said that he was busy." Option A ("he is busy") fails to backshift the tense. Options C and D ("I am busy," "I was busy") fail to change the pronoun from "I" to "he," which is crucial for accurate reporting. Therefore, option B is the correct conversion.