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 15 crore and 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?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

APEDIA

UPSC Prelims

2023 • 28 May, 2023 • Paper-1

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 15 crore and 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?

Correct Answer

Neither 1 nor 2

Subject: Economy.Context: Industrial Classifications.Details: Statement 1 is incorrect; the MSME definition was revised in 2020. A 'Medium enterprise' is now de......

💡 Analysis & Explanation

Subject ▼

Economy.

Context ▼

Industrial Classifications.

Details ▼

Statement 1 is incorrect; the MSME definition was revised in 2020. A 'Medium enterprise' is now defined as one with an investment up to ₹50 crore and turnover up to ₹250 crore. Statement 2 is incorrect; while MSME lending is a major part of Priority Sector Lending (PSL), it comes with specific sub-targets and criteria, so not 'all' unrestricted bank loans automatically qualify under PSL quotas.

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