Statement 1 is incorrect: The Parliamentary Committee on Public Accounts (PAC) consists of not more than 22 members, not 25, elected by the Lok Sabha (the lower house) and Rajya Sabha (the upper house) of the Indian Parliament according to the principle of proportional representation. Statement 2 is correct: The PAC's primary function is to scrutinize the appropriation (budget) accounts of the Government of India. This involves examining how the government has spent the funds allocated to it by Parliament. Statement 3 is correct: The PAC examines the reports of the Comptroller and Auditor General of India (CAG). The CAG is an independent constitutional authority that audits the accounts of the Union Government and the State governments. The PAC uses the CAG's reports as a basis for its scrutiny of government spending.