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 15 crore and 25 crore. 2. A

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Q: 91 (IAS/2023)
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 15 crore and 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?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,5,18,4,9,5,5

The explanation for each option is as follows:

Option 1: This statement is incorrect. According to the MSMED Act, 2006, for a medium enterprise to be classified under the manufacturing sector, the investment in plant and machinery must be more than Rs. 5 crore but does not exceed Rs. 10 crore.

Option 2: This statement is also incorrect. Not all bank loans to the Micro, Small and Medium Enterprises fall under the priority sector. There are certain guidelines and restrictions put in place by the Reserve Bank of India which defines what kind of bank loans qualify under the priority sector lending.

Option 3: As both statements are inaccurate, this option is also incorrect.

Option 4: This is the correct answer. Neither of the statements is correct as they are misleading on the definitions and rules regarding the Micro, Small and Medium Enterprises.

Therefore, the provided answer stands valid.