Explanation:

Only statements 1&2 are correct.

• A year-and-a-half after New Delhi issued a notice to Islamabad seeking the “modification” of the Indus Waters Treaty (IWT) in January 2023, India has once again sent a formal notice to Pakistan, this time seeking the “review and modification” of the treaty.

About Indus Water Treaty

• The Indus Water Treaty (IWT) was signed by former Prime Minister Jawaharlal Nehru and then President of Pakistan, Ayub Khan in 1960.

• The treaty sets out a mechanism for cooperation between India-Pakistan over the Indus System of Rivers.

• Statement 1 is correct: The Indus Waters Treaty was signed in 1960 after nine years of negotiations between India and Pakistan with the help of the World Bank, which is also a signatory.

Water Allocation: 

• Statement 2 is correct: The three ‘western rivers’ (Indus, Jhelum and Chenab) went to Pakistan and the three ‘eastern rivers’ (Sutlej, Ravi and Beas) were portioned to India.

• Statement 3 is incorrect: However, India is permitted to use the waters of the Western Rivers for:  Domestic Use,  Non-consumptive use,  Agricultural use as specified, Generation of hydro-electric power.

Hence option 2nd is correct.