Q. Consider the following statements regarding the Micro, Small and Medium Enterprises (MSMEs):
1.The enterprises are defined according to the manpower hired.
2.Micro enterprises can invest up to 1crore rupees.
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
Notes:

Explanation: As per the SMSE Act, 2006 the MSME are classified in two classes —manufacturing and service enterprises—and they are defined in terms of investment in plant & machinery.

The Central Government notifies the following criteria for classification of micro, small and medium enterprises, namely: —

  1. a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
  2. a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;
  3. a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

Source: TMH Ramesh Singh & https://msme.gov.in/sites/default/files/MSME_gazette_of_india.pdf