The Hunter Commission of 1882 was set up in order to review the state of education in India. While extracting the essence of the options gives us a better understanding -

Option 1 suggests that the commission took a negative view of university education, which is not accurate, as the commission was not against university education.

Option 2 suggests that the commission overruled the Despatch of 1854, which is not true as this Despatch later turned into an important document for educational reform, and the commission did not have the power to overrule it.

Option 3, the correct one, encapsulates the commission`s focus on emphasizing primary education, building on the foundation of the Despatch of 1854. The commission indeed encouraged a grassroots approach to education, prioritizing primary and secondary schooling to improve literacy rates.

Finally, option 4 suggests that the commission criticized the grants-in-aid system for schooling. This isn`t entirely accurate, as the commission did recognize the importance of government funding for education, but its focus was more on the promotion of primary education.