gs1medium

Consider the following statements with reference to India:

  1. 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. 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. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
▶ Answer & Explanation

Correct answer: B. 2 only

The MSMED Act, 2006, defines medium enterprises based on turnover, not solely investment in plant and machinery, and the investment thresholds have been revised. Priority Sector Lending guidelines by the Reserve Bank of India specifically include loans to MSMEs, ensuring they receive preferential treatment in credit allocation, thus qualifying all such bank loans under the priority sector.

Source: UPSC gs1 2023

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