BPSC 71st CCE Prelims General Studies · Question 49 of 150

Correct — B, 27.3%, 30.1%. The Ministry of Micro, Small and Medium Enterprises publishes a single series for the sector's share in all-India Gross Value Added, and it reads 27.3% in 2020-21, 29.6% in 2021-22 and 30.1% in 2022-23. Both blanks in option (b) match that series exactly — not approximately, which matters in a fill-in-the-number question where a near miss is still a wrong answer. The shape of the series is as informative as the two endpoints. 2020-21 is the COVID year: the national lockdown from late March 2020 shut down informal manufacturing, construction-linked trades, retail and transport, which is where micro and small enterprises live, and their output fell further and faster than that of large corporates who could carry inventory, borrow and work remotely. 27.3% is therefore a trough, not a normal level. The 29.6% of 2021-22 is the rebound and the 30.1% of 2022-23 is the sector back at roughly its long-run share of the economy — the 'about 30% of the economy' figure that every Economic Survey, ministry factsheet and Budget speech quotes. Two technical points are worth carrying with the number. First, this is a share of Gross Value Added, not of GDP: GDP at market prices equals GVA at basic prices plus product taxes minus product subsidies, so a sector's GVA share and its GDP share are close but not identical, and quoting one for the other is a standard source of confusion. Second, the series carries a lag of roughly two years because a large part of MSME output sits in unincorporated enterprises whose value added has to be estimated within the National Accounts rather than read off a return — which is why 2022-23 was still the latest available year at the time of the September-2025 exam.

• (a)30.3%, 35.6% — Both figures overshoot. 30.3% is roughly where the series ENDS in 2022-23, not where it starts, and no published year in this series has reached 35.6% — the recent peak is 30.1%. This is the most dangerous distractor precisely because its first number sits so close to the remembered 'about 30%' fact: a candidate who has the right anchor but has not asked which end of the period it belongs to will pick this. The direction of the question is the check — the share increased, so the well-known figure has to be the second blank.
• (c)35.1%, 38.2% — Higher still, and adrift of the published data by five to eight percentage points at both ends. These numbers feel plausible because two other MSME statistics really do sit in that range and above: MSME-related products were 43.59% of India's total exports in 2022-23 and 45.73% in 2023-24, and the small-scale sector's share of manufacturing turnover has historically been quoted around 40%. Neither is the sector's share of national Gross Value Added. Three different denominators — exports, manufacturing output and the whole economy — produce three different percentages, and this option borrows from the wrong one.
• (d)More than one of the above — A single published series can be matched by only one pair of numbers, so 'More than one of the above' cannot hold on a question of this form unless two options were printed with identical figures. Checking directly: (a) overstates the closing figure by more than five percentage points and misplaces the opening one, and (c) overstates both by five to eight points. Neither can join (b), and BPSC's fourth option — which is genuinely the key on other questions of this paper — fails here.

Gross Value Added measures the output of a producing unit net of the intermediate goods and services it consumed to make that output, so summing GVA across all producers avoids double-counting; GDP at market prices is GVA at basic prices plus product taxes minus product subsidies. Estimating what share of that total belongs to micro, small and medium enterprises is genuinely difficult, because most of the sector is unincorporated and files no annual accounts, so the National Accounts estimate its value added rather than observe it — hence the two-year publication lag. Who counts as an MSME is itself a statutory question. The Micro, Small and Medium Enterprises Development Act, 2006 created the three-way classification, and a 2020 notification replaced the old investment-only test with a composite criterion of investment in plant, machinery or equipment AND annual turnover, while abolishing the separate, lower thresholds that manufacturing and service enterprises used to face. That single change moved a large population of firms across category lines, which is one reason MSME statistics before and after 2020 are not strictly comparable. The Union Budget 2025-26 then raised the limits again — investment ceilings by two and a half times and turnover ceilings by two — taking micro to Rs 2.5 crore of investment and Rs 10 crore of turnover, small to Rs 25 crore and Rs 100 crore, and medium to Rs 125 crore and Rs 500 crore.

A two-blank statistical question is not a memory test if you carry one anchor and one direction. The anchor is the single most-quoted MSME fact in Indian economic writing: the sector is worth roughly 30% of the economy. The direction is given by the stem itself — the share 'increased from … to …', so the remembered 30% must be the SECOND blank and the first must be visibly lower. Apply the two together and only option (b) survives: (a) parks 30.3% at the start and then invents a 35.6% the sector has never reached, and (c) starts above the sector's known ceiling and climbs from there. Notice that the direction test alone does not discriminate — all three printed pairs rise — which is exactly why the anchor has to be attached to a year and not floated free. A second, independent check is the economics of the period: 2020-21 is the COVID year and MSMEs were the worst-hit segment of the economy, so the opening figure ought to be a depressed one, well below the sector's normal share. 27.3% behaves like a trough; 30.3% and 35.1% do not. The trap that catches good candidates is denominator drift — MSMEs account for over 43% of India's exports and the small-scale sector was historically quoted at around 40% of manufacturing turnover, so numbers in the mid-thirties feel authentic. They belong to different denominators. Read the words 'Gross Value Added' in the stem as an instruction about which of the three percentages the examiner wants.

• MSME share in all-India Gross Value Added, Ministry of MSME series: 27.3% in 2020-21, 29.6% in 2021-22 and 30.1% in 2022-23 — the two ends of that series are the two blanks in this question.
• MSME-related products accounted for 43.59% of India's total exports in 2022-23, 45.73% in 2023-24 and 45.79% in 2024-25 up to May 2024; MSME exports rose from Rs 3.95 lakh crore in 2020-21 to Rs 12.39 lakh crore in 2024-25.
• The number of exporting MSMEs rose from 52,849 in 2020-21 to 1,73,350 in 2024-25, and 5.93 crore MSMEs stood registered on the Udyam portal, together employing more than 25 crore people.
• The Union Budget 2025-26 raised the MSME classification investment limits two and a half times and the turnover limits two times, and doubled the credit guarantee cover for micro and small enterprises from Rs 5 crore to Rs 10 crore.
• Definition and credit rules to keep with the number: the MSMED Act, 2006 created the classification, the 2020 notification made it a composite investment-plus-turnover test with no separate manufacturing and services thresholds, and the Reserve Bank's directions treat all bank loans to MSMEs as priority sector lending regardless of the amount.

• Confusing MSMEs' share of Gross Value Added (about 30%) with their share of exports (over 43%) or of manufacturing turnover — three different percentages against three different denominators, quoted interchangeably in coaching material.
• Forgetting that the stem says 'increased from … to …', which forces the familiar 30% figure into the second blank and rules out any pair that opens there.
• Treating GVA and GDP as identical. They differ by product taxes minus product subsidies, so the same sector can be quoted with slightly different shares depending on which aggregate is used.

BPSC's economy questions often take this two-blank statistical form built from a single ministry factsheet, with 'More than one of the above' as the fourth option — so a candidate who knows only the order of magnitude and the direction of change can still eliminate everything but one pair, and precision matters only at the last step. UPSC does not ask a current year's percentage in this shape at all. It asks the statutory definition, as in its 2023 question on the MSMED Act's thresholds and whether MSME loans qualify as priority sector, or — in its older papers — a single order-of-magnitude share of the small-scale sector in manufacturing turnover. Carry the definition and the credit rules for UPSC, and the ministry's latest published pair for BPSC.

• practice — not a real PYQ

  Under the classification notified in 2020 under the MSMED Act, 2006, an enterprise is classified as micro, small or medium on the basis of

  • (a)investment in plant and machinery only
  • (b)annual turnover only
  • (c)a composite criterion of investment in plant and machinery or equipment and annual turnover
  • (d)the number of workers employed

  Answer(c) a composite criterion of investment in plant and machinery or equipment and annual turnover — the 2020 revision replaced the older investment-only test and removed the separate thresholds for manufacturing and service enterprises.

• practice — not a real PYQ

  Gross Value Added (GVA) at basic prices differs from Gross Domestic Product (GDP) at market prices by

  • (a)net factor income from abroad
  • (b)product taxes minus product subsidies
  • (c)consumption of fixed capital
  • (d)net indirect taxes on production only

  Answer(b) product taxes minus product subsidies — GDP at market prices = GVA at basic prices + product taxes − product subsidies. Net factor income from abroad is what separates GDP from GNP, and consumption of fixed capital is what separates gross from net.