MSME UPSC Prelims MCQ's
Statement-Based Questions:
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With respect to the MSME sector in India, consider the following statements:
- The MSME sector contributes more than 30% to India's GDP.
- The Udyam Registration Portal was launched to simplify the registration process for MSMEs.
- The MSME sector is primarily dominated by the service industry.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation:
Statement 1 is correct, as the MSME sector contributes significantly to India’s GDP. Statement 2 is correct because the Udyam Registration Portal was launched to streamline the registration process. However, Statement 3 is incorrect as the MSME sector is not primarily dominated by the service industry; it encompasses both manufacturing and services.
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With respect to the role of the Department for Promotion of Industry and Internal Trade (DPIIT), consider the following statements:
- DPIIT is responsible for formulating and implementing policies for the growth of the MSME sector.
- DPIIT launched the 'Champions Portal' to address grievances of MSMEs.
- DPIIT does not play any role in promoting entrepreneurship in India.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation:
DPIIT is actively involved in promoting and formulating policies for MSMEs, and it also launched the 'Champions Portal' to address MSME grievances. Statement 3 is incorrect because DPIIT does play a role in fostering entrepreneurship in India.
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With respect to the Small Industries Development Bank of India (SIDBI), consider the following statements:
- SIDBI provides financial assistance exclusively to large-scale industries.
- SIDBI launched the '59 Minutes Loan' scheme to provide quick credit to MSMEs.
- SIDBI is not involved in the development of micro-enterprises.
Which of the statements is/are correct?
A) Only 1
B) Only 2
C) Only 2 and 3
D) None of the above
Answer: B) Only 2
Explanation:
SIDBI is focused on providing financial assistance to small and medium enterprises (SMEs), not large-scale industries, making Statement 1 incorrect. SIDBI launched the '59 Minutes Loan' scheme for MSMEs, which makes Statement 2 correct. Statement 3 is incorrect because SIDBI is involved in the development of micro-enterprises as well.
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With respect to the MSME Development Institute (MSME-DI), consider the following statements:
- MSME-DI provides training and consultancy services to MSMEs.
- MSME-DI is responsible for implementing the 'Make in India' initiative.
- MSME-DI operates under the Ministry of Finance.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation:
MSME-DI indeed provides training and consultancy services to MSMEs, which makes Statement 1 correct. However, it is not responsible for implementing the 'Make in India' initiative, which is handled by a different ministry. MSME-DI operates under the Ministry of MSME, not the Ministry of Finance, making Statements 2 and 3 incorrect.
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With respect to the Udyam Registration Portal, consider the following statements:
- It replaced the earlier system of MSME registration known as Udyog Aadhaar.
- The registration process is entirely offline.
- It is mandatory for all MSMEs to register on the Udyam Portal to avail government benefits.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: B) Only 1 and 3
Explanation:
The Udyam Registration Portal replaced the Udyog Aadhaar system, so Statement 1 is correct. The registration process is fully online, not offline, making Statement 2 incorrect. It is indeed mandatory for MSMEs to register on the Udyam Portal to avail various government benefits, so Statement 3 is correct.
Current Affairs-Based Questions:
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With respect to the 'Raising and Accelerating MSME Performance' (RAMP) scheme, consider the following statements:
- It is a World Bank-assisted scheme aimed at strengthening the MSME sector in India.
- The scheme focuses on improving access to finance and market opportunities for MSMEs.
- It was launched in 2023 under the Ministry of Finance.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation:
The RAMP scheme is indeed World Bank-assisted, and it focuses on improving access to finance and market opportunities for MSMEs. However, it was launched in 2022, not 2023, making Statement 3 incorrect.
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With respect to the 'Prime Minister Employment Generation Programme' (PMEGP), consider the following statements:
- It is a credit-linked subsidy program for setting up micro-enterprises.
- The program is implemented by the Ministry of Micro, Small, and Medium Enterprises.
- It provides financial assistance only to urban areas.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation:
The PMEGP is a credit-linked subsidy scheme for setting up micro-enterprises, and it is implemented by the Ministry of MSME. However, it provides assistance to both urban and rural areas, making Statement 3 incorrect.
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With respect to the 'Self-Reliant India' (SRI) Fund, consider the following statements:
- It aims to provide equity funding to MSMEs.
- The fund is managed by SIDBI.
- It focuses only on large-scale industries.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation:
The SRI Fund aims to provide equity funding to MSMEs, and it is managed by SIDBI. It does not focus on large-scale industries, making Statement 3 incorrect.
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With respect to the 'Credit Guarantee Fund Trust for Micro and Small Enterprises' (CGTMSE), consider the following statements:
- It provides collateral-free credit to MSMEs.
- The scheme is jointly managed by SIDBI and the Government of India.
- It covers loans up to ₹2 crores.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: D) All 1, 2, and 3
Explanation:
CGTMSE provides collateral-free credit, is jointly managed by SIDBI and the Government of India, and covers loans up to ₹2 crores. All statements are correct.
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With respect to the 'Zero Defect Zero Effect' (ZED) scheme, consider the following statements:
- It aims to encourage MSMEs to produce high-quality products with minimal environmental impact.
- The scheme is implemented by the Ministry of Environment, Forest, and Climate Change.
- It provides certification to MSMEs based on their performance.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: B) Only 1 and 3
Explanation:
The ZED scheme encourages MSMEs to produce high-quality products with minimal environmental impact, and it provides certification based on performance. However, it is implemented by the Ministry of MSME, not the Ministry of Environment, Forest, and Climate Change, making Statement 2 incorrect.
Here are the questions formatted as requested:
Statement-Based Questions:
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With respect to the role of District Industries Centers (DICs), consider the following statements:
- DICs provide assistance to entrepreneurs in setting up new enterprises.
- DICs are responsible for implementing central government schemes at the district level.
- DICs do not play any role in providing financial support to MSMEs.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: District Industries Centers (DICs) primarily assist entrepreneurs in setting up new enterprises and are responsible for implementing government schemes at the district level. However, they do not directly provide financial support to MSMEs, as their role is more focused on facilitation and coordination.
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With respect to the Entrepreneurship Development Institute of India (EDII), consider the following statements:
- EDII is an autonomous body under the Ministry of Skill Development and Entrepreneurship.
- EDII provides training and consultancy services to aspiring entrepreneurs.
- EDII is headquartered in Mumbai.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Entrepreneurship Development Institute of India (EDII) is an autonomous body that provides training and consultancy services to aspiring entrepreneurs. It operates under the Ministry of Skill Development and Entrepreneurship. However, it is headquartered in Ahmedabad, not Mumbai.
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With respect to the 'Make in India' initiative, consider the following statements:
- It aims to promote India as a global manufacturing hub.
- The initiative focuses exclusively on large-scale industries.
- It has no relevance to the MSME sector.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation: The 'Make in India' initiative aims to position India as a global manufacturing hub, encouraging investments in the manufacturing sector. It is not exclusively focused on large-scale industries and also supports MSMEs as part of its broader goals.
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With respect to the 'Stand-Up India' scheme, consider the following statements:
- It promotes entrepreneurship among women and SC/ST communities.
- The scheme provides bank loans between ₹10 lakh and ₹1 crore.
- It is implemented by the Ministry of Finance.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: D) All 1, 2, and 3
Explanation: The 'Stand-Up India' scheme promotes entrepreneurship among women and SC/ST communities by providing bank loans between ₹10 lakh and ₹1 crore. It is implemented by the Ministry of Finance to encourage new enterprises in these communities.
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With respect to the 'MSME Sambandh' portal, consider the following statements:
- It monitors the implementation of public procurement policies for MSMEs.
- The portal was launched by the Ministry of Micro, Small, and Medium Enterprises.
- It is mandatory for all government departments to report their procurement from MSMEs on this portal.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: D) All 1, 2, and 3
Explanation: The 'MSME Sambandh' portal monitors the implementation of public procurement policies for MSMEs, and it was launched by the Ministry of MSME. It is mandatory for all government departments to report their procurement from MSMEs on this portal, ensuring transparency and accountability.
Current Affairs-Based Questions:
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With respect to the 'Aatmanirbhar Bharat Abhiyan' and its impact on MSMEs, consider the following statements:
- The government announced a ₹3 lakh crore collateral-free loan scheme for MSMEs under this initiative.
- The scheme aims to provide financial support to stressed MSMEs.
- The loans are provided at a 0% interest rate.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The ₹3 lakh crore collateral-free loan scheme was announced under the Aatmanirbhar Bharat Abhiyan to support MSMEs, especially those facing stress due to the pandemic. However, the scheme does not provide loans at a 0% interest rate; the rate is determined by banks and financial institutions.
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With respect to the 'Emergency Credit Line Guarantee Scheme' (ECLGS), consider the following statements:
- It was launched to provide relief to MSMEs affected by the COVID-19 pandemic.
- The scheme is fully funded by the Reserve Bank of India (RBI).
- It covers loans up to ₹500 crores for large corporations.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation: The Emergency Credit Line Guarantee Scheme (ECLGS) was launched to support MSMEs affected by the COVID-19 pandemic, providing financial relief. It is not fully funded by the Reserve Bank of India (RBI), and it does not cover large corporations. The scheme targets MSMEs with loans up to ₹1 crore.
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With respect to the 'Technology Upgradation Fund Scheme' (TUFS) for MSMEs, consider the following statements:
- It provides financial assistance for the modernization of textile MSMEs.
- The scheme is implemented by the Ministry of Textiles.
- It covers only small-scale industries and not micro-enterprises.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Technology Upgradation Fund Scheme (TUFS) provides financial assistance for modernizing the textile MSMEs and is implemented by the Ministry of Textiles. It does not exclude micro-enterprises and is meant for MSMEs in general, including small and micro-scale industries.
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With respect to the 'Digital MSME Scheme', consider the following statements:
- It aims to promote the adoption of digital technologies by MSMEs.
- The scheme provides subsidies for the purchase of IT hardware and software.
- It is implemented by the Ministry of Electronics and Information Technology.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Digital MSME Scheme promotes the adoption of digital technologies by MSMEs, and it provides subsidies for IT hardware and software purchases. However, it is implemented by the Ministry of MSME, not the Ministry of Electronics and Information Technology.
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With respect to the 'National Small Industries Corporation' (NSIC), consider the following statements:
- NSIC provides marketing support to MSMEs.
- It operates under the Ministry of Commerce and Industry.
- NSIC does not provide any financial assistance to MSMEs.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: B) Only 1 and 2
Explanation: The National Small Industries Corporation (NSIC) provides marketing support to MSMEs and operates under the Ministry of Commerce and Industry. It also provides financial assistance to MSMEs in various forms, including credit facilitation, so the third statement is incorrect.
Here are the formatted questions with explanations at the end of each answer:
Statement-Based Questions:
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With respect to the 'Cluster Development Programme' for MSMEs, consider the following statements:
- It aims to enhance the productivity and competitiveness of MSMEs.
- The program is implemented by the Ministry of Micro, Small, and Medium Enterprises.
- It focuses only on rural areas and excludes urban MSMEs.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Cluster Development Programme aims to enhance the competitiveness of MSMEs by promoting group collaboration among MSMEs. It is implemented by the Ministry of MSME and is not limited to rural areas, thus it includes urban MSMEs as well.
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With respect to the 'Public Procurement Policy for MSMEs', consider the following statements:
- It mandates that 25% of total procurement by central ministries and PSUs should be from MSMEs.
- The policy also includes a provision for 3% procurement from MSMEs owned by women.
- The policy is applicable only to manufacturing MSMEs and not service-based MSMEs.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Public Procurement Policy mandates 25% procurement from MSMEs by central ministries and PSUs, with 3% reserved for MSMEs owned by women. The policy applies to both manufacturing and service-based MSMEs.
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With respect to the 'Interest Subvention Scheme' for MSMEs, consider the following statements:
- It provides a 2% interest subvention on fresh or incremental loans.
- The scheme is applicable only to manufacturing MSMEs.
- The scheme is implemented by the Reserve Bank of India (RBI).
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: B) Only 1 and 2
Explanation: The scheme provides a 2% interest subvention on fresh or incremental loans to MSMEs, but it is not limited to manufacturing MSMEs. The scheme is implemented by the Ministry of MSME, not the RBI.
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With respect to the 'Trade Receivables Discounting System' (TReDS), consider the following statements:
- It is an electronic platform for financing trade receivables of MSMEs.
- It allows MSMEs to auction their trade receivables to financiers.
- The platform is regulated by the Securities and Exchange Board of India (SEBI).
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: TReDS is an electronic platform that allows MSMEs to auction trade receivables to financiers, helping them get quicker access to funds. It is regulated by the Reserve Bank of India (RBI), not SEBI.
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With respect to the 'National Manufacturing Competitiveness Programme' (NMCP), consider the following statements:
- It aims to enhance the competitiveness of the manufacturing sector, particularly MSMEs.
- The program includes components like Lean Manufacturing and Design Clinics.
- It is implemented by the Ministry of Commerce and Industry.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: NMCP aims to improve the competitiveness of MSMEs, particularly in manufacturing. It includes components such as Lean Manufacturing and Design Clinics and is implemented by the Ministry of MSME, not the Ministry of Commerce.
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With respect to the 'MSME Innovative Scheme', consider the following statements:
- It provides financial support for the development of innovative products and processes.
- The scheme is implemented by the Ministry of Science and Technology.
- It is open only to micro-enterprises and not small or medium enterprises.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation: The MSME Innovative Scheme provides financial support for the development of innovative products and processes but is implemented by the Ministry of MSME, not the Ministry of Science and Technology. It is open to all types of MSMEs, not just micro-enterprises.
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With respect to the 'Venture Capital Assistance Scheme' for MSMEs, consider the following statements:
- It provides equity support to MSMEs for technology upgradation and modernization.
- The scheme is implemented by the Small Industries Development Bank of India (SIDBI).
- It is available only to MSMEs in the service sector.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Venture Capital Assistance Scheme provides equity support for technology upgradation and modernization. It is implemented by SIDBI and is available to MSMEs in all sectors, not just the service sector.
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With respect to the 'Marketing Assistance Scheme' for MSMEs, consider the following statements:
- It aims to help MSMEs participate in domestic and international trade fairs.
- The scheme provides financial assistance for marketing activities.
- It is implemented by the Ministry of Commerce and Industry.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Marketing Assistance Scheme helps MSMEs participate in trade fairs and provides financial assistance for marketing activities. It is implemented by the Ministry of MSME, not the Ministry of Commerce and Industry.
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With respect to the 'Coir Udyami Yojana', consider the following statements:
- It is a scheme for the development of the coir industry, which is part of the MSME sector.
- The scheme provides financial assistance for the modernization of coir units.
- It is implemented by the Ministry of Agriculture.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The Coir Udyami Yojana promotes the development of the coir industry within the MSME sector and provides financial assistance for modernization. It is implemented by the Ministry of MSME, not the Ministry of Agriculture.
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With respect to the 'MSME Export Promotion Council', consider the following statements:
- It promotes the export of products and services from the MSME sector.
- The council is a statutory body under the Ministry of Commerce and Industry.
- It provides financial assistance to MSMEs for export-related activities.
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation: The MSME Export Promotion Council promotes exports from the MSME sector but is not a statutory body under the Ministry of Commerce and Industry. It does not provide direct financial assistance for export-related activities.
Current Affairs-Based Questions:
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With respect to the 'MSME Champions Scheme', consider the following statements:
- It aims to support MSMEs in becoming national and international champions.
- The scheme includes components like technology upgradation and market access.
- It is implemented by the Ministry of Finance.
Which of the statements is/are correct?
A) Only 1 and 2
B) Only 1 and 3
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1 and 2
Explanation: The MSME Champions Scheme aims to support MSMEs in enhancing their competitiveness on national and international levels, focusing on technology and market access. It is implemented by the Ministry of MSME, not the Ministry of Finance.
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With respect to the 'PSB Loans in 59 Minutes' scheme, consider the following statements:
- It provides in-principle approval for MSME loans within 59 minutes.
- The scheme is available only to manufacturing MSMEs.
- It is implemented by the Reserve Bank of India (RBI).
Which of the statements is/are correct?
A) Only 1
B) Only 1 and 2
C) Only 2 and 3
D) All 1, 2, and 3
Answer: A) Only 1
Explanation: The 'PSB Loans in 59 Minutes' scheme provides quick in-principle approval for MSME loans, and it is not restricted to manufacturing MSMEs. The scheme is implemented by public sector banks, not RBI.
