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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?

UPSC · 2023 · Economy
Question:
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?

Options

1 only
2 only
Both 1 and 2
Neither 1 nor 2
Answer: 2 only

Explanation:
The 2020 amendment defines medium enterprises based on turnover, not investment. However, loans to MSMEs do fall under priority sector lending.

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