{"id":92106,"date":"2025-06-01T11:14:02","date_gmt":"2025-06-01T11:14:02","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=92106"},"modified":"2025-06-01T11:14:02","modified_gmt":"2025-06-01T11:14:02","slug":"according-to-the-micro-small-and-medium-enterprises-development-msm","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/","title":{"rendered":"According to the \u2018Micro, Small and Medium Enterprises Development (MSM"},"content":{"rendered":"<p>According to the \u2018Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the \u2018medium enterprises&#8217; are those with investments in plant and machinery between \u20b9 15 crore and \u20b9 25 crore.<\/p>\n<ul>\n<li>2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.<\/li>\n<\/ul>\n<p>Which of the statements given above is\/are correct?<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option2&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2023<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2023.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2023\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement 1 is incorrect as per the definitions of &#8216;medium enterprises&#8217; under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being > \u20b95 crore and <= \u20b910 crore for manufacturing, and > \u20b92 crore and <= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions.\n- All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.\n<\/section>\n<section id=\"pyq-additional-information\">\nThe MSMED Act, 2006 provided the legal framework for classifying and promoting MSMEs in India. The definitions were revised in 2020, introducing a composite criterion based on both investment and annual turnover, and significantly increasing the thresholds for classification. Priority Sector Lending guidelines mandate banks to lend a certain portion of their total credit to specified sectors, including MSMEs, agriculture, education, housing, etc.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>According to the \u2018Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the \u2018medium enterprises&#8217; are those with investments in plant and machinery between \u20b9 15 crore and \u20b9 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? &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"According to the \u2018Micro, Small and Medium Enterprises Development (MSM\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/#more-92106\">Detailed Solution<span class=\"screen-reader-text\">According to the \u2018Micro, Small and Medium Enterprises Development (MSM<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1105,1120,1163],"class_list":["post-92106","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1105","tag-economic-development","tag-industrial-sector","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>According to the \u2018Micro, Small and Medium Enterprises Development (MSM<\/title>\n<meta name=\"description\" content=\"Statement 1 is incorrect as per the definitions of &#039;medium enterprises&#039; under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs. - Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being &gt; \u20b95 crore and \u20b92 crore and &lt;= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"According to the \u2018Micro, Small and Medium Enterprises Development (MSM\" \/>\n<meta property=\"og:description\" content=\"Statement 1 is incorrect as per the definitions of &#039;medium enterprises&#039; under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs. - Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being &gt; \u20b95 crore and \u20b92 crore and &lt;= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:14:02+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"According to the \u2018Micro, Small and Medium Enterprises Development (MSM","description":"Statement 1 is incorrect as per the definitions of 'medium enterprises' under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs. - Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being > \u20b95 crore and \u20b92 crore and &lt;= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/","og_locale":"en_US","og_type":"article","og_title":"According to the \u2018Micro, Small and Medium Enterprises Development (MSM","og_description":"Statement 1 is incorrect as per the definitions of 'medium enterprises' under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs. - Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being > \u20b95 crore and \u20b92 crore and &lt;= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:14:02+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/","url":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/","name":"According to the \u2018Micro, Small and Medium Enterprises Development (MSM","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:14:02+00:00","dateModified":"2025-06-01T11:14:02+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement 1 is incorrect as per the definitions of 'medium enterprises' under the MSMED Act, 2006 (including relevant notifications before the 2020 revision). Statement 2 is correct regarding the priority sector status of bank loans to MSMEs. - Under the MSMED Act, 2006 (prior to the 2020 revision), Medium Enterprises were defined based on investment in Plant and Machinery\/Equipment, with limits generally being > \u20b95 crore and \u20b92 crore and &lt;= \u20b95 crore for services. The range \u20b915 crore to \u20b925 crore does not match these official definitions. - All bank loans extended to Micro, Small, and Medium Enterprises (MSMEs) generally qualify as priority sector lending as per Reserve Bank of India (RBI) guidelines. This is a policy measure to ensure adequate credit flow to these sectors.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/according-to-the-micro-small-and-medium-enterprises-development-msm\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"According to the \u2018Micro, Small and Medium Enterprises Development (MSM"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=92106"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92106\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=92106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=92106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=92106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}