UPSC Prelims 2023 · Question 91 of 97
UPSC Prelims 2023 question on Msme Definition
- ExamUPSC CSE
- Year2023
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicIndustry
- DifficultyHard
- TypeStatement
Consider the following statements with reference to India:
1. According to the 'Micro Small and Medium enterprises Development (MSMED) Act, 2006, the 'medium enterprises' are those with investments in plant and machinery between Rs. 15 crore and Rs. 25 crore.
2. All bank loans to the Micro, Small and Medium Enterprises qualify under the Priority sector.
Which of the statements given above is/are correct?
Show answer
Answer: B. 2 Only
Verdict
Only statement 2 is correct → Option (b) 2 Only.
Statement by statement
Statement 1 – INCORRECT: Union Ministry of MSMEs has issued Gazette notification for implementation of the upward revision in the definition and criteria of MSMEs. As per the new criteria, a medium enterprise is where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees. The old MSMED Act 2006 criteria of Rs. 15–25 crore is outdated and incorrect.
Statement 2 – CORRECT: In terms of Master Direction on 'Priority Sector Lending (PSL) – Targets and Classification' dated September 4, 2020, all bank loans to MSMEs conforming to the conditions prescribed therein qualify for classification under priority sector lending.