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 Rs 15 crore and Rs 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?
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A hard Economy multiple-choice question from UPSC Prelims 2023. Attempt it above, then check the correct answer and detailed explanation below.
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Correct answer: B. 2 only
Statement 2 is correct — all bank loans to MSMEs qualify as priority sector lending. Statement 1 is wrong — the investment thresholds for medium enterprises are not Rs 15-25 crore (the MSME definition was revised, adding turnover criteria).
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