Which of the following statements about recommendations of the 15th Finance Commission is/are correct? 

1. Basic (untied) grants can be used by rural local bodies for location-specific felt needs under the 29 subjects enshrined in the Eleventh Schedule of the Constitution of India except for salaries and other establishment costs.
2. Tied grants can be used for basic services of sanitation and maintenance of ODF status, management and treatment of household waste and human excreta.
3. It recommended 'Health Grants' to create diagnostic infrastructure in primary health care facilities.

Select the correct answer using the code given below.