Q1. 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?
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
Question from UPSC Prelims 2023 GS Paper
Explanation :
Correct Answer – b ( This is the official answer)
According to MSMED Act 2006 upsc
After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmnirbhar Bharat package on 13th May, 2020.
As per this announcement, the definition of Micro manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. The limit of Small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of Medium unit was increased to Rs. 20 Crore of investment and Rs. 100 Crore of turnover.
The Government of India on 01.06.2020 decided for further upward revision of the MSME Definition. For Medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover.
Priority Sector Lending Guidelines
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.
According to UPSC, Statement 2 is correct.