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Option 1: 1 and 2 only. This option is incorrect because both Morarji Desai and Gulzari Lal Nanda have not been honored with the Bharat Ratna.
Option 2: 2, 3 and 4 only. This option is incorrect because although Gulzari Lal Nanda, C. Subramaniam, and Ustad Bismillah Khan have been honored with the Bharat Ratna, it is missing the fact that Morarji Desai is also a recipient of this honor.
Option 3: 1 and 4 only. This option is incorrect because while Morarji Desai has indeed been honored with the Bharat Ratna, Ustad Bismillah Khan has not.
Option 4: 1, 2, 3 and 4. This option is correct. It includes all the names mentioned in the previous options who have been honored with the Bharat Ratna: Morarji Desai, Gulzari Lal Nanda, C. Subramaniam, and Ustad Bismillah Khan.
In summary, the correct answer is option 4 because all the individuals mentioned have been honored with the Bharat Ratna.