Consider the following statements about the Micro, Small and Medium Enterprises (MSMEs): 1. The MSMEs comprise a dynamic sector of the Indian economy providing large employment opportunities. 2. MSMEs require low capital cost and help industrialization of backward regions. 3. MSMEs contribute enormously to socio-economic development. How many of the above statements is/are correct?
- (a)None
- (b)1
- (c)2
- (d)3
Correct — D, 3. All three statements are the standard official description of the sector, and none of them contains a figure or a claim that could be falsified. On employment, the Ministry of MSME's own factsheet records 5.93 crore registered enterprises supporting more than 25 crore jobs, second only to agriculture. On capital and location, the sector is defined by low investment thresholds — an enterprise stays micro below ₹1 crore of investment and ₹5 crore of turnover — which is exactly why an MSME can be set up where a large factory cannot, and why the MSMED Act and the cluster development programmes are written around dispersing industry to backward districts. On the third, the sector's share of gross value added rose from 27.3 per cent in 2020-21 to 30.1 per cent in 2022-23, and MSME-related products made up 45.73 per cent of India's exports, so calling its contribution to socio-economic development enormous is not overstatement.
- (a)None — Rejects the whole set, which would require the sector to be small, capital-heavy and economically marginal. It is none of those things.
- (b)1 — Accepts only the employment claim. The low-capital and backward-region point is the sector's defining economic feature, not an add-on.
- (c)2 — The near miss. Students often drop statement 3 as vague, but it is the mildest claim of the three and is supported by the sector's share in gross value added and in exports.
The MSMED Act, 2006 classifies enterprises by investment in plant and machinery together with turnover. Since the July 2020 revision an enterprise is micro up to ₹1 crore of investment and ₹5 crore of turnover, small up to ₹10 crore and ₹50 crore, and medium up to ₹50 crore and ₹250 crore, with manufacturing and services treated alike. Registration is through the Udyam portal. The policy interest in the sector rests on a simple arithmetic fact: it produces far more employment per rupee of capital than large industry does.
Statement questions of this shape carry no trap. Every clause is a claim the government itself makes about the sector in its annual report and its scheme documents, and there is no number to check or exception to find. The examiner is testing whether a candidate is willing to mark 'all three' when nothing is wrong, and a large number of candidates are not — they hunt for a flaw that is not there and settle on two. The habit worth building is to read each statement for a falsifiable claim; where there is none, the statement stands. For the same reason it is worth keeping the sector's real numbers to hand, because the harder version of this question replaces one of these general sentences with a figure.
- Under the MSMED Act as revised in July 2020, an enterprise is micro up to ₹1 crore investment and ₹5 crore turnover, small up to ₹10 crore and ₹50 crore, and medium up to ₹50 crore and ₹250 crore.
- The Ministry of MSME records 5.93 crore registered enterprises supporting over 25 crore jobs.
- The sector's share in India's gross value added moved from 27.3 per cent in 2020-21 to 29.6 per cent in 2021-22 and 30.1 per cent in 2022-23.
- MSME-related products accounted for 43.59 per cent of India's exports in 2022-23 and 45.73 per cent in the following year.
- All bank loans to MSMEs qualify as priority sector lending.
- Marking 'two' out of reflex on a three-statement item where nothing is actually wrong.
- Using the pre-2020 investment limits, which were far lower and treated manufacturing and services separately.
- Assuming turnover alone decides classification; the criterion is investment and turnover together.
As a count-the-correct-statements item on the sector's importance, or as a harder version that swaps in a specific investment limit, turnover limit or share of exports.
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?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer(b) 2 only
The harder version of the same topic, and the one to prepare for. Where CDS asks whether the sector matters, UPSC asks for the investment band and the priority sector position — and the band in the question is the pre-2020 one, which is why it fails.
Which of the following can aid in furthering the Government's objective of inclusive growth? 1. Promoting Self-Help Groups 2. Promoting Micro, Small and Medium Enterprises 3. Implementing the Right to Education Act Select the correct answer using the codes given below :
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer(d) 1, 2 and 3
Another all-three item built the same way, and a reminder that examiners do set questions where nothing is wrong. The reason MSMEs appear in an inclusive-growth list is the second CDS statement — low capital per job, spread across regions.
- practice — not a real PYQ
Under the classification in force since July 2020, an enterprise is a micro enterprise if its investment in plant and machinery and its turnover do not exceed, respectively,
- (a)₹25 lakh and ₹1 crore
- (b)₹1 crore and ₹5 crore
- (c)₹10 crore and ₹50 crore
- (d)₹50 crore and ₹250 crore
Answer(b) ₹1 crore and ₹5 crore — the small and medium bands are ₹10 crore with ₹50 crore and ₹50 crore with ₹250 crore.
- practice — not a real PYQ
Registration of a micro, small or medium enterprise in India is done on which one of the following portals?
- (a)GeM
- (b)Udyam
- (c)TReDS
- (d)Samadhaan
Answer(b) Udyam — it replaced the Udyog Aadhaar memorandum from 1 July 2020; GeM is for public procurement, TReDS for discounting receivables and Samadhaan for delayed-payment complaints.