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UPSC CDS 2 2022 GK Paper

Question : 70 of 120

Marks: +1, -0

Consider the following statements about the Micro, Small and Medium Enterprises (MSMEs):

1. The MSMEs comprise a dynamic sector of the Indian economy providing large employment opportunities.

2. MSMEs require low capital cost and help industrialization of backward regions.

3. MSMEs contribute enormously to socio-economic development.

How many of the above statements is/are correct?

None
1
2
3

Validate

Solution:

Concept:

Micro, Small and Medium Enterprises (MSMEs) are a vital pillar of the Indian economy, driving employment, industrialization, and socio-economic growth with low capital needs.

Explanation:

MSMEs are defined under the MSMED Act, 2006 by investment and turnover limits (micro: up to

\mathrm{Rs.~1~crore}

investment,

\mathrm{Rs.~5~crore}

turnover; small: up to

\mathrm{Rs.~10~crore}

investment,

\mathrm{Rs.~50~crore}

turnover; medium: up to

\mathrm{Rs.~50~crore}

investment,

\mathrm{Rs.~250~crore}

turnover).

Statement 1 is correct: MSMEs employ over

\mathrm{12~crore}

people, making them the second-largest job provider after agriculture.

Statement 2 is correct: They require relatively low capital cost compared to large industries and help industrialize rural and backward areas, reducing regional imbalances.

Statement 3 is correct: They contribute significantly to socio-economic development — about

6.11\%

of manufacturing GDP,

24.63\%

of service GDP, and

45\%

of India’s total exports.

All three given statements accurately describe the role and impact of MSMEs.

Answer:

D. 3 (All three statements are correct.)

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