The correct answer is (c) 2018.
The Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) was enacted to provide a comprehensive framework for the promotion, development and regulation of Micro, Small and Medium Enterprises (MSMEs) in India. The Act defines an MSME as an enterprise that has investment in plant and machinery up to Rs. 10 crore or turnover up to Rs. 50 crore, whichever is lower.
The MSME Act was amended in 2018 to provide for a new classification of MSMEs based on their investment in plant and machinery and turnover. The new classification is as follows:
- Micro Enterprise: An enterprise with investment in plant and machinery up to Rs. 1 crore or turnover up to Rs. 5 crore, whichever is lower.
- Small Enterprise: An enterprise with investment in plant and machinery up to Rs. 10 crore or turnover up to Rs. 50 crore, whichever is lower.
- Medium Enterprise: An enterprise with investment in plant and machinery up to Rs. 50 crore or turnover up to Rs. 250 crore, whichever is lower.
The new classification came into effect from 1 April 2019.
The following are the reasons for the new classification of MSMEs:
- To provide a more accurate and realistic picture of the MSME sector in India.
- To facilitate better targeting of government schemes and support measures for MSMEs.
- To promote the growth and development of MSMEs.
- To improve the competitiveness of MSMEs in the global market.