Question
Download Solution PDFConsider 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?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFMicro, Small, and Medium Enterprises Development (MSMED) Act, 2006:
- Micro Enterprise:
- Investment in plant and machinery or equipment does not exceed Rs. 1 crore, and turnover does not exceed Rs. 5 crore.
- Small Enterprise:
- Investment in plant and machinery or equipment does not exceed Rs. 10 crore, and turnover does not exceed Rs. 50 crore.
- Medium Enterprise:
- Investment in plant and machinery or equipment does not exceed Rs. 50 crore, and turnover does not exceed Rs. 250 crore.
- Hence, Statement 1 is not correct, as the investment range for medium enterprises is not between Rs. 15 crore and Rs. 25 crore.
- Priority Sector Lending (PSL):
- Definition: Priority Sector Lending (PSL) is a policy by the Reserve Bank of India (RBI) to direct institutional credit towards sectors that may not receive adequate financing.
- Inclusion of MSMEs: MSMEs (Micro, Small, and Medium Enterprises) are included under PSL. Thus, all bank loans to MSMEs qualify under the priority sector.
- Hence, Statement 2 is correct.
- PSL Targets:
- Banks are required to lend a certain percentage of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEA) to priority sectors.
- Penalty: Banks failing to meet PSL targets must contribute to the Rural Infrastructure Development Fund (RIDF) with NABARD and other funds as decided by the RBI.
- Therefore, the correct answer is Option 2: 2 only.
Last updated on Jun 23, 2025
-> Candidates can check out the Daily Headlines for 23 June UPSC Current Affairs
-> UPSC Launched PRATIBHA Setu Portal to connect aspirants who did not make it to the final merit list of various UPSC Exams, with top-tier employers.
-> Check Fastag Annual Pass 2025 New rules Rs. 3000 for 200 highway trips per year announced by the nitin Kadgari.
-> Candidates who have cleared the Prelims can now fill the UPSC DAF 1 2025 form for the Mains examination on the official website.
-> The UPSC CSE and IFS result has been released @upsc.gov.in on 11 June, 2025. Check UPSC Prelims Result 2025, UPSC IFS Result 2025
-> UPSC Launches New Online Portal upsconline.nic.in. Check OTR Registration Process.
-> Check UPSC Prelims 2025 Exam Analysis and UPSC Prelims 2025 Question Paper for GS Paper 1 & CSAT.
-> UPSC Exam Calendar 2026. UPSC CSE 2026 Notification will be released on 14 January, 2026.
-> Calculate your Prelims score using the UPSC Marks Calculator.
-> Go through the UPSC Previous Year Papers and UPSC Civil Services Test Series to enhance your preparation.
-> PM Kisan 20th Installment Date 2025: Beneficiary Status & List, Check eKYC Process.
-> Punjab Police Constable Answer Key 2025 Out
-> UGC NET 2025 Admit Card Out @ugcnet.nta.nic.in