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?
✓ Correct answer: b) 2 only
ExplanationStatement 1 is incorrect : The MSMED Act, 2006 orig- inally defined medium enterprises as those with investments in plant and machinery between ₹5 crore and ₹10 crore.As per the latest guidelines of 2020 a medium enterprise presently is de- fined as one where the investment in plant and machinery or equipment does not exceed ₹50 crore and turnover does not exceed ₹250 crore and not ₹15 crore to ₹25 crore.The fol- lowing table provides the details of revised limits: Category Old Capital Old Turnover New Capital New Turn- over Micro 25 Lakh 10 Lakh 1 Crore 5 Crore Small 5 Crore 2 Crore 10 Crore 50 Crore Medium 10 Crore 5 Crore 50 Crore 250 CroreStatement 2 is correct : The Reserve Bank of India’s Master Directions on Priority Sector Lending (PSL) specify that bank loans to Micro, Small, and Medium Enterprises are eligible for classification under the priority sector but subject to certain conditions.While loans to micro and small enterprises are fully eligible, loans to medium enterprises are considered under PSL only up to a certain limit.Specifically, bank loans up to ₹10 crore
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