The correct option is B
2 and 3 only
Explanation:
Statement 1 is incorrect: Under his Subsidiary Alliance system, the ruler of the allying Indian State was compelled to accept the permanent stationing of a British force within his territory and to pay a subsidy for its maintenance. All this was done allegedly for his protection but was, in fact, a form through which the Indian ruler paid tribute to the Company, Sometimes the ruler ceded part of his territory instead of paying annual subsidy. The Subsidiary Treaty also usually provided that the Indian ruler would agree to the posting at his court of a British Resident, that he would not employ any European in his service without the approval of the British, and that he would not negotiate with any other Indian ruler without consulting the Governor-General. In return, the British undertook to defend the ruler from his enemies. They also promised non-interference in the internal affairs of the allied state, but this was a promise they seldom kept.
Statement 2 is correct: By signing a Subsidiary Alliance, an Indian state virtually signed away its independence. It lost the right of self-defence, of maintaining diplomatic relations, of employing foreign experts, and of settling its disputes with its neighbours. In fact, the Indian ruler lost all vestiges of sovereignty in external matters and became increasingly subservient to the British Resident who interfered in the day to day administration of the state.
Statement 3 is correct: The system of Subsidiary Alliances also led to the disbandment of the armies of the protected states. Lakhs of soldiers and officers were deprived of their hereditary livelihood, spreading misery and degradation in the country. Many of them joined the roaming bands of Pindarees which were to ravage the whole of India during the first two decades of the 19th century.