CAPF AC 2020 Q35: Indian Economy – Infrastructure & Industry
What is meant by MSME?
- (a) Medium, Small and Marginalized Enterprises
- (b) Micro, Small and Marginalized Enterprises
- (c) Medium, Strategic and Micro Enterprises
- (d) Micro, Small and Medium Enterprises
Answer: (d) Micro, Small and Medium Enterprises
Explanation
MSME
How to think: the letters go from the smallest to the biggest.
Micro, then Small, then Medium.
MSME stands for Micro, Small and Medium Enterprises.
| Class | Investment in plant and machinery (2020 definition) | Annual turnover (2020 definition) |
|---|---|---|
| Micro | Up to ₹1 crore | Up to ₹5 crore |
| Small | Up to ₹10 crore | Up to ₹50 crore |
| Medium | Up to ₹50 crore | Up to ₹250 crore |
These limits applied from 1 July 2020.
They were raised again in 2025.
Facts to know:
| Fact | Detail |
|---|---|
| Law | MSMED Act, 2006 |
| Registration | Udyam portal |
| 2020 change | Same limits for manufacturing and services |
Answer: (d) Micro, Small and Medium Enterprises.
Why each option is right or wrong
- (a) Incorrect. There is no class called Marginalized enterprises, and Micro is missing.
- (b) Incorrect. Marginalized is wrong; the last word is Medium.
- (c) Incorrect. Strategic is not one of the three classes.
- (d) CORRECT. MSME means Micro, Small and Medium Enterprises.
Key point
MSME = Micro, Small and Medium Enterprises (MSMED Act, 2006). 2020 limits: investment ₹1, ₹10, ₹50 crore; turnover ₹5, ₹50, ₹250 crore.
Remember
MSME = Micro, Small and Medium Enterprises.
Common mistakes
- Reading the first M as Medium instead of Micro.
- Remembering only the investment limit and forgetting the turnover limit added in 2020.
- Thinking manufacturing and services still have separate limits.
Exam tip
Smallest to biggest: Micro, Small, Medium. Any option with another word is wrong.
Sources
- Micro, Small and Medium Enterprises Development Act, 2006
- Ministry of MSME — Revised classification of MSMEs effective 1 July 2020