It needs a neutron source to start fission, but once it's going, in theory it can self-sustain as Th decay genearates radio-isotopes. Furthermore it can breed fissile fuel with thermal neutrons, which is generally seen as an advantage.
The neutron economy, however, is very slim. Several of the intermediate decay products are neutron absorbers. This is why you see a lot of proposed liquid thorium reactors, there are various proposals to use chemical reactions to remove neutron absorbers from the fuel while the reactor is running (something that would be challenging with a solid reactor).
You start with thorium plus a fissionable isotope of uranium or plutonium. The fission neutrons convert the thorium to U-233, which is fissionable. After that you rely on U-233 fission for neutrons and keep feeding thorium to it.
It can be done with solid fuel but with liquid fuel it works out really nicely. You can fission pretty much everything and have just fission products left over, which means a lot less nuclear waste that only has to be contained for a few hundred years. And you're not shipping anything fissionable to or from the reactor.
which eventually uses Pu-239 from the fast-breeder reactors (2nd stage) as the neutron source to take it to the 3rd stage.
IIRC, the original plan predicted to reach the 3rd stage in the 90s', but due to various sanctions, it is still stuck in the first stage; probably it will speed up now due to the Indo-US nuclear deal during the 2nd term of the Bush administration.
The neutron economy, however, is very slim. Several of the intermediate decay products are neutron absorbers. This is why you see a lot of proposed liquid thorium reactors, there are various proposals to use chemical reactions to remove neutron absorbers from the fuel while the reactor is running (something that would be challenging with a solid reactor).