Forest ServicesQ91. Consider 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?
Detailed Solution
Both statements are incorrect: 1. **Statement 1**: The definition of MSMEs was revised in 2020. As per the updated criteria, a 'medium enterprise' is defined as one with an investment in Plant and Machinery or Equipment not exceeding fifty crore rupees AND turnover not exceeding two hundred and fifty crore rupees.
The figures mentioned in the statement are outdated. 2. **Statement 2**: While bank loans to MSMEs are generally eligible for classification under Priority Sector Lending (PSL), it is not an unconditional 'all' loans.
They must conform to specific guidelines and conditions prescribed by the Reserve Bank of India (RBI), such as being engaged in manufacturing or providing services as per specified acts. Therefore, the blanket statement 'All bank loans' is incorrect.
This question tests updated knowledge of government policies and financial regulations concerning MSMEs, a vital sector for the Indian economy and a frequent topic in UPSC Economy.
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