The correct answer is (b).
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 100 crore. All bank loans to the Micro, Small and Medium Enterprises do not qualify under the priority sector.
The priority sector is a segment of the Indian economy that is given special attention by the Reserve Bank of India (RBI). The RBI has defined the priority sector as comprising agriculture, small-scale industries, tiny industries, village and cottage industries, retail trade, education, housing, and transport. Bank loans to these sectors are considered to be priority sector lending and are subject to certain special rules and regulations.
Micro, small, and medium enterprises (MSMEs) are an important part of the Indian economy. They account for over 90% of all enterprises in India and employ over 60% of the workforce. MSMEs are also a major contributor to India’s exports.
The RBI has set targets for banks to lend to the priority sector. These targets are based on the bank’s total assets. Banks that do not meet their priority sector lending targets are subject to penalties.
The RBI’s priority sector lending targets are designed to promote economic growth and development in India. By lending to the priority sector, banks are helping to finance small businesses, agriculture, and other important sectors of the economy.