Since area of a hole is very small in comparison to base area A of the cylinder, velocity of liquid inside the cylinder is negligible. Let velocity of efflux be v and atmospheric pressure be $$P_0$$.
Consider two points A (inside the cylinder) and B (must outside the hole) in the same horizontal line as shown in the figure in question.
Pressure at A: $$P_A= P_0 + h\rho_2g + (h-y)\rho_1g$$
Pressure at A: $$P_B= P_0$$
Applying Bernoulli's theorem at points A and B
$$ P_A + \dfrac{1}{2}\rho_2v_2^2 + (\rho_2 gh + \rho_1 g(h-y))= P_B + \dfrac{1}{2}\rho_1v_1^2 + (\rho_2 gh + \rho_1 g(h-y) )$$ .....(1)
Substituting $$ P_A $$ and $$ P_B$$ in eqn(1) we get,
$$P_0 + h\rho_2g + (h-y)\rho_1g + \dfrac{1}{2}\rho_2v_2^2 + (\rho_2 gh + \rho_1 g(h-y))= P_0 + \dfrac{1}{2}\rho_1v_1^2 + (\rho_2 gh + \rho_1 g(h-y) )$$ ....(2)
Given,
$$A=0.5\: m^2$$
$$a =5 cm^2 = 25 \times 10^{-4}\: m^2$$
From continuity equation,
$$Av_2 = av_1$$
$$\therefore \dfrac{v_2}{v_1} = \dfrac{a}{A}= \dfrac{25 \times 10^{-4}}{0.5}=50 \times 10^{-4}$$
Given $$h= 60\: cm=0.6\: m$$
$$y=20 \: cm = 0.2 \:m$$
$$\rho_1= 900\: kg\:m^{-3}$$
$$\rho_2= 600\: kg\:m^{-3}$$
$$P_0 + h\rho_2g + (h-y)\rho_1g + \dfrac{1}{2}\rho_2v_2^2 = P_0 + \dfrac{1}{2}\rho_1v_1^2 $$
As given in the problem, we ignore $$v_2$$ since a is very small.
$$ \therefore P_0 + h\rho_2g + (h-y)\rho_1g = P_0 + \dfrac{1}{2}\rho_1v_1^2 $$
$$ \therefore h\rho_2g + (h-y)\rho_1g = \dfrac{1}{2}\rho_1v_1^2$$
Substituting the values, $$0.6 \times 600 \times 10 + (0.6-0.2) \times 900 \times 10 = \dfrac{1}{2} \times 900 \times v_1^2$$
$$ \Rightarrow v_1 = 4\: ms^{-1}$$