Explanation:

Explanation:

In India’s developmental plan exercise we have two types of schemes viz; central sector and centrally sponsored scheme. The nomenclature is derived from the pattern of funding and the modality for implementation.

• Under Central sector schemes, it is 100% funded by the Union government and implemented by the Central Government machinery. Central sector schemes are mainly formulated on subjects from the Union List. In addition, the Central Ministries also implement some schemes directly in States/UTs which are called Central Sector Schemes but resources under these Schemes are not generally transferred to States. Hence, statement 1 is incorrect.
• Under Centrally Sponsored Scheme (CSS) a certain percentage of the funding is borne by the States in the ratio of 50:50, 70:30, 75:25 or 90:10 and the implementation is by the State Governments. Centrally Sponsored Schemes are formulated in subjects from the State List to encourage States to prioritise in areas that require more attention. Hence, statement 2 is correct.

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has accepted the major recommendations of the Sub-Group of Chief Minsters on Rationalization of Centrally Sponsored Schemes (CSSs).
Categorisation of Schemes: Existing CSSs should be divided into Core and Optional Schemes.
 i. Core schemes: Focus of CSSs should be on schemes that comprise the National Development Agenda where the Centre and States will work together in the spirit of Team India.
 ii. Core of the Core Schemes: Those schemes which are for social protection and social inclusion should form the core of core and be the first charge on available funds for the National Development Agenda.
 iii. Optional Schemes: The Schemes where States would be free to choose the ones they wish to implement. Funds for these schemes would be allocated to States by the Ministry of Finance as a lump sum. Hence, statement 3 is incorrect