The correct answer is 2 only.

Contract Labour (Regulation and Abolition) Act, 1970

• The act defines a worker as a workman who shall be deemed to be employed as contract labour in or in connection with the work of an establishment where he is hired in or in connection with such work by or through a contractor or without the knowledge of the employer. 
• The main objectives of the act are
  • to prohibit the employment of contract labour. Hence, Statement 1 is incorrect.
  • to regulate the working conditions of the Contract Labour where ever such employment is not prohibited. Hence, Statement 2 is correct.
• It regulates the employment of contract labour in certain establishments.
• It applies to every establishment where there are 20 or more workmen employed on any day of the preceding 12 months as contract labour. 
  • The Government may by notification in the Official Gazette make provisions of the applicable to establishments or contractor employing less than 20 workmen. 
• It prohibits the employment of contract labour jobs that are perennial in nature and where permanent employees need to be employed.
• A contractor needs to obtain a licence issued by a licensing officer in order to work through contract labour as mentioned under section 7 of the act.

• It is not applicable to the establishment in which the work is only of an intermittent or casual nature.