Step 1: Analyzing statement (I).
Karewa is not related to moraine deposits. Moraine deposits are related to glaciers, while Karewa refers to a type of sedimentary deposit, specifically in the Kashmir region.
Thus, (I) is incorrect.
Step 2: Analyzing statement (II).
Karewa soil is famous for saffron cultivation, especially in the Kashmir Valley. This is a correct statement.
Thus, (II) is correct.
Step 3: Analyzing statement (III).
Karewa is not a clay-like deposit formed by the decomposition of plant matter. This refers to peat or humus, not Karewa.
Thus, (III) is incorrect.
Step 4: Conclusion.
Only statement (II) is correct. Hence, the answer is (B).