Solution

● Statement 1 is correct: The System of Budget was introduced in 1860 during the tenure of Lord Canning. Important events occurred during the tenure of Lord Canning: §  Revolt of 1857. §  Indian Councils Act, 1861. §  Introduction of Portfolio system in 1859. §  White Mutiny by European troops in 1859. ● Statement 2 is incorrect: Discussion on Budget was allowed in the Indian Councils Act, 1892 but it was not voted upon. It was only in the Government of India Act, 1909 that voting was allowed in certain items of the Budget only. Hence only a limited portion of them could be voted upon. Budget as a whole was still not subjected to voting. ● Statement 3 is correct: Provincial budget was separated from the federal budget in the GOI Act, 1919. Other provisions of the Government of India Act, 1919 (Montagu-Chelmsford reforms) are as follows: §  Divided the subjects between the Central and Provincial legislatures. §  Introduced Dyarchy at the provinces (Provincial subjects were divided into transferred and reserved) §  Introduced bicameralism in the Indian Legislative Council. §  Extended separate electorates for the Sikhs, Indian Christians, Anglo-Indians and Europeans. §  Provided for the establishment of Central Public Service Commission (set up in 1926) on the recommendation of the Lee Commission. §  Separated provincial budget from the Central budget.