Explanation:

• Statement 1st is correct: These are debt instruments issued by the government to borrow money. The two key categories are treasury bills – short-term instruments which mature in 91 days, 182 days, or 364 days, and dated securities – long-term instruments, which mature anywhere between 5 years and 40 years.
• Statement 2nd is incorrect: In India, the Central Government issues both treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).
• Statement 3rd is incorrect: Like bank fixed deposits, g-secs are not tax-free. They are generally considered the safest form of investment because they are backed by the government.

Hence both statements 2&3 are incorrect.