Explanation:

• Lord Curzon justified greater control over universities in the name of quality and efficiency, but actually sought to restrict education and to discipline the educated towards loyalty to the Government. With an idea to bring the Universities under control, which he felt had become hotbeds of revolutionary activities. Lord Curzon appointed Raleigh Commission under Sir Thomas Raleigh. This commission submitted its report in 1902 and this followed the introduction of a Bill called Raleigh Bill. The Raleigh Bill when became an act, it was called Indian Universities Act 1904. Hence statement 2 is  not correct.
• The Act increased Government's control over the universities. It could veto the regulations passed by the Senate of the University. It allowed the Government to appoint a majority of the fellows in a university. The Governor General was now empowered to decide a University's territorial limits. Hence statement 1 is correct.
• Also, it increased University control over private colleges by laying down stricter conditions for affiliation and periodical inspection. Here also, the government approval was necessary for grant of affiliation and disaffiliation of colleges. Hence statement 3 is correct.
• However, for better education and research a grant of Rs. 5 Lakh per year for 5 years was also accepted.