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MSME policy, regulatory and legal framework

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Small and Medium Enterprises in India — Certificate Course on MSME.

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Q

What is the primary legislation governing MSME development in India?

A

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is the primary legislation that provides the framework for promotion and development of MSMEs in India.

Q

What is the full form of MSMED Act?

A

Micro, Small and Medium Enterprises Development Act, 2006

Q

Which ministry is responsible for policy formulation related to MSMEs in India?

A

The Ministry of Micro, Small and Medium Enterprises (MoMSME) is responsible for policy formulation, coordination, and monitoring of programs related to MSMEs in India.

Q

Under which schedule of the Constitution do states derive power to legislate on small industries?

A

Entry 24 of List II (State List) of Seventh Schedule

Q

What are the revised investment and turnover limits for a Micro enterprise under the Atma Nirbhar Bharat classification?

A

A Micro enterprise must have investment in plant and machinery or equipment not exceeding Rs. 1 crore and annual turnover not exceeding Rs. 5 crore.

Q

What is the maximum period within which a buyer must make payment to an MSME supplier if no agreement exists?

A

45 days from the day of acceptance or deemed acceptance

Q

What are the investment and turnover criteria for classifying a unit as a Small enterprise?

A

A Small enterprise must have investment not exceeding Rs. 10 crore and annual turnover not exceeding Rs. 50 crore as per the revised MSMED Act classification.

Q

What rate of compound interest is payable on delayed payments to MSMEs under the MSMED Act?

A

Three times the bank rate notified by the Reserve Bank of India

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