AnjaliOberoi wrote:Unless is a subordinate conjunction and it requires Subject and Verb and only {B} fits into this rule
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You're right about the use of "unless," but "inoculation is" is also a subject and verb, as is "there is."

This question seems to be trying to test PASSIVE v. ACTIVE constructions. All else being equal, we generally prefer active voice to passive voice.
Active: I baked a cake.
Passive: The cake was baked by me.

That said, there are a number of serious issues with this question:

1) "They are inoculated" is not, in fact, active! The inoculation is being done to the victims, so this is also a passive construction. It's more direct in its meaning than "inoculation is done" or "there is inoculation." Those two are vague - they don't specify WHO is receiving the inoculation. But none of these three is grammatically incorrect!

(The other two answers, A and E, are grammatically incorrect - "unless inoculated" implies that the rabies is the thing inoculated. We inoculate people, not diseases).

2) The GMAT rarely, rarely tests ACTIVE v. PASSIVE. When it does, there are almost always other issues with the wrong answers - bad parallelism, wrong modifiers, etc. It is almost assured that you would never be asked to choose between 3 sentences that are each grammatically correct, but just have very subtle shades of meaning difference.

This is simply a bad question; you should disregard it.