Share of Micro, Small and Medium Enterprises in the country's Gross Value Added (GVA) has increased from ______ in 2020-21 to ______ in 2022-23.

Question

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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.

Why the other options are wrong — (a) 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) 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) 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.

Concept: 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.

State PCS 2025 Q49 — Economy PYQ with Answer

State PCS 2025 Q49 — Economy PYQ with Answer