UPSC CSE Prelims
Question 94
Consider the following statements with reference to India :
- 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.
- All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
View correct answer and explanation
Correct answer: B
Correct Option: B (2 only)
Explanation: Under the relevant RBI priority-sector directions, bank lending to eligible MSMEs qualified, while the proposed ₹15–25 crore statutory medium-enterprise bracket is inaccurate.
Statement / Pair / Item-wise Analysis:
1. Incorrect/False - MSMED classifications differ by period; the stated ₹15–25 crore machinery-investment band is not the definition under the 2006 Act.
2. Correct/True - RBI’s relevant priority-sector directions included bank loans to qualifying MSMEs.
Option-wise Analysis:
A. Incorrect-incorrectly includes 1 (MSMED classifications differ by period; the stated ₹15–25 crore machinery-investment band is not the definition under the 2006 Act.); omits correct item 2 (RBI’s relevant priority-sector directions included bank loans to qualifying MSMEs.).
B. Correct-exactly 1 of the 2 listed items satisfy the condition.
C. Incorrect-incorrectly includes 1 (MSMED classifications differ by period; the stated ₹15–25 crore machinery-investment band is not the definition under the 2006 Act.).
D. Incorrect-omits correct item 2 (RBI’s relevant priority-sector directions included bank loans to qualifying MSMEs.).
Review note: MSME thresholds have changed (notably in 2020 and subsequently); do not read the stated 2006-Act definition as today’s definition.