Explanation:

 A cantonment board is for municipal administration for civilian population in the cantonment area. A cantonment area is a delimited area where the military forces are permanently stationed. It is set up under Cantonments Act of 2006 - enacted by the Central Government. It works under the administrative control of the Defence ministry of Central Government.

A cantonment board is created and administered by the Central government. The Cantonments Act of 2006 was enacted to consolidate and amend the law relating to the administration of cantonments. This Act repealed the Cantonments Act of 1924.

At present, there are 62 cantonment boards in the country grouped into 4 categories based on civil population. A cantonment board is partly elected and partly nominated. Thus statement 2 is correct.

Elected members hold office for a term of five years while the nominated members (i.e., ex-officio members) continue so long as they hold the office in that station. The military officer commanding the station is the ex-officio president of the board and presides over its meetings. The Vice-President of the board is elected by the elected members from amongst themselves for a term of five years.

Functions performed by a cantonment board are similar to that of a municipality and are classified as obligatory and discretionary functions. The sources of income are tax and non- tax revenue. Thus statement 3 is incorrect. The executive officer of the cantonment board is appointed by the President of India. Thus, statement 1 is correct.