1. What is the primary objective of the Priority Sector lending in India?
A. To maximize bank profits
B. To promote foreign investment
C. To provide credit to sectors that are underserved
D. To fund luxury industries
Priority Sector lending aims to ensure that credit reaches agriculture, MSMEs, education, housing, and other underserved sectors to promote inclusive growth.
2. Which of the following is NOT included in the Priority Sector as identified by RBI?
A. Agriculture
B. Luxury tourism projects
C. Micro, Small and Medium Enterprises (MSMEs)
D. Education loans
RBI’s Priority Sector does not include luxury projects. It focuses on sectors like agriculture, MSMEs, education, housing, and others that need development support.
3. Micro, Small and Medium Enterprises (MSMEs) fall under which category in Priority Sector lending?
A. Agriculture
B. Housing
C. Education
D. Micro, Small and Medium Enterprises (MSMEs)
MSMEs are explicitly identified as a part of Priority Sector lending to boost entrepreneurship, employment, and regional economic development.
4. Which of the following is a key role of Priority Sector lending in India?
A. Promoting inclusive economic growth by supporting underdeveloped sectors
B. Financing only large corporations
C. Reducing bank credit to rural areas
D. Limiting credit to urban sectors
Priority Sector lending ensures that credit reaches farmers, MSMEs, and other underserved sectors to promote equitable and inclusive economic development.
5. Which of the following loans is considered a Priority Sector loan?
A. Personal loan for luxury car
B. Small agricultural loan to a farmer
C. Corporate bond investment
D. Stock market margin funding
Loans to farmers and other small enterprises are covered under Priority Sector lending as per RBI guidelines.
6. What is the current target for banks to lend to the Priority Sector as per RBI guidelines?
A. 25% of total advances
B. 30% of total advances
C. 40% of total advances
D. 50% of total advances
As per RBI guidelines, scheduled commercial banks are required to lend **at least 40% of their adjusted net bank credit to Priority Sector** to ensure inclusive growth.
7. What does MSME stand for in the Indian economic context?
A. Micro, Small and Medium Enterprises
B. Major Small Manufacturing Enterprises
C. Micro Small Marketing Entities
D. Medium Scale Manufacturing Enterprise
MSME stands for **Micro, Small and Medium Enterprises**, which are critical for employment, exports, and regional development in India.
8. According to the latest MSME definition, which criterion is used to classify an enterprise as Micro, Small, or Medium?
A. Number of employees only
B. Investment in plant & machinery or equipment and annual turnover
C. Age of the enterprise
D. Location of enterprise
MSMEs are classified based on **investment in plant & machinery or equipment** and **annual turnover** as per the MSMED Act and latest government notifications.
9. Under Priority Sector Lending norms, loans to which of the following would be included?
A. Luxury apartments in metro cities
B. High-end corporate offices
C. Stock market investments
D. Small farmer loans for crop cultivation
Priority Sector Lending includes loans to farmers, micro-enterprises, weaker sections, and sectors that are under-served, not luxury or corporate loans.
10. Which of the following is a key change in the MSME definition notified in 2020?
A. Combining investment and turnover criteria to classify enterprises
B. Classification based on number of employees only
C. Only investment in plant & machinery considered
D. No change; old definition continues
In 2020, the government revised MSME definition to **include both investment and annual turnover criteria**, replacing the earlier investment-only criteria.
11. What is the primary role of MSMEs in the Indian economy?
A. Promoting only large-scale industrialization
B. Generating employment and supporting entrepreneurship
C. Controlling imports and exports solely
D. Managing monetary policy of the country
MSMEs play a key role in **generating employment, fostering entrepreneurship, and contributing to regional economic development**, which is vital for inclusive growth.
12. Approximately what percentage of India’s total employment is provided by MSMEs?
A. 10%
B. 25%
C. 40%
D. 60%
MSMEs in India provide employment to about **40% of the total workforce**, making them crucial for economic stability and job creation.
13. What is the contribution of MSMEs to India’s GDP as of recent estimates?
A. Around 10%
B. Around 20%
C. Around 30%
D. Around 30–35%
MSMEs contribute approximately **30–35% of India’s GDP**, highlighting their importance in economic growth and industrial development.
14. Which of the following is a significant advantage of promoting MSMEs in rural areas?
A. Reducing regional disparities and preventing urban migration
B. Increasing dependency on imports
C. Focusing only on luxury goods production
D. Limiting employment opportunities
Promoting MSMEs in rural areas helps **reduce regional economic disparities, create local employment, and reduce migration to urban centers**.
15. Which of the following sectors receives the maximum contribution from MSMEs in India?
A. Large-scale heavy industries
B. Manufacturing and services
C. Only agriculture
D. Only IT and software sector
MSMEs contribute significantly to both **manufacturing and service sectors**, supporting exports, innovation, and employment generation.
16. Which of the following schemes was announced under the Atmanirbhar Bharat package to support MSMEs?
A. MGNREGA
B. Pradhan Mantri Awas Yojana
C. Emergency Credit Line Guarantee Scheme (ECLGS)
D. PM-KISAN
The **Emergency Credit Line Guarantee Scheme (ECLGS)** was introduced under the Atmanirbhar Bharat package to provide collateral-free loans to MSMEs affected by COVID-19.
17. What is the maximum loan amount guaranteed under ECLGS for eligible MSMEs?
A. ₹25 lakh
B. ₹200 crore
C. ₹50 crore
D. ₹500 crore
ECLGS provides **guaranteed emergency credit up to ₹200 crore** to eligible MSMEs to maintain liquidity and sustain operations.
18. Which initiative under Atmanirbhar Bharat focuses on improving the credit flow to MSMEs?
A. Startup India
B. Make in India
C. Skill India
D. Collateral-free guaranteed loans under ECLGS
The Atmanirbhar Bharat package strengthened MSME financing through **collateral-free guaranteed loans** to boost credit availability.
19. What is one of the key objectives of supporting MSMEs under Atmanirbhar Bharat?
A. Ensure business continuity and employment retention
B. Promote import of goods only
C. Limit production to select sectors
D. Focus only on urban enterprises
Atmanirbhar Bharat initiatives for MSMEs aim to **ensure business continuity, sustain employment, and improve credit flow** during economic disruptions.
20. Which of the following is a major benefit of the Atmanirbhar Bharat MSME initiatives?
A. Reduced agricultural output
B. Increased urban congestion
C. Enhanced liquidity and easier access to credit for MSMEs
D. Restriction of exports
The Atmanirbhar Bharat package for MSMEs **provides easier access to collateral-free loans**, improving liquidity and helping businesses survive and grow.
21. What is the main objective of the Make in India initiative?
A. Promote foreign outsourcing only
B. Encourage manufacturing and boost domestic production
C. Limit MSME activities to rural areas
D. Focus solely on IT services
The Make in India initiative aims to **boost manufacturing, promote domestic production, and attract investment** in various sectors to strengthen the Indian economy.
22. Which of the following is a key feature of the Startup India initiative?
A. Providing loans to large corporations only
B. Focusing solely on import substitution
C. Tax exemption for all companies
D. Support for entrepreneurship through funding, incubation, and regulatory relaxation
Startup India provides **funding support, incubation facilities, and regulatory benefits** to promote entrepreneurship and innovation among new enterprises.
23. The Stand-Up India scheme primarily targets which group of entrepreneurs?
A. Women and SC/ST entrepreneurs
B. Only large corporate firms
C. Urban IT startups only
D. Foreign investors
Stand-Up India provides bank loans **between ₹10 lakh and ₹1 crore** to women and SC/ST entrepreneurs to promote inclusive entrepreneurship.
24. Which of the following is a common feature of Make in India, Startup India, and Stand-Up India?
A. Focus only on urban infrastructure
B. Restrict credit flow to existing large firms
C. Promote entrepreneurship, innovation, and employment generation
D. Limit production to agricultural goods
These initiatives aim to **boost entrepreneurship, create jobs, encourage innovation, and strengthen the MSME and startup ecosystem** in India.
25. Under Stand-Up India, what is the minimum amount of loan available to eligible borrowers?
A. ₹1 lakh
B. ₹10 lakh
C. ₹25 lakh
D. ₹50 lakh
Stand-Up India provides bank loans **ranging from ₹10 lakh to ₹1 crore** to promote entrepreneurship among women and SC/ST communities.
26. What is the primary aim of the revised MSME classification criteria effective from April 1, 2025?
A. To reduce the number of MSMEs
B. To increase the tax burden on MSMEs
C. To allow growing enterprises to retain MSME benefits
D. To eliminate MSMEs from the formal economy
The revised MSME classification criteria aim to **allow enterprises to expand without losing MSME benefits**, thereby encouraging growth and innovation.
27. Under the Union Budget 2025-26, what is the enhanced credit guarantee cover for MSMEs?
A. ₹1 crore
B. ₹2 crore
C. ₹5 crore
D. ₹10 crore
The credit guarantee cover for MSMEs has been enhanced to **₹10 crore**, facilitating easier access to credit for enterprises.
28. What is the purpose of the MSME Credit Card introduced in the Union Budget 2025-26?
A. To provide long-term loans to large enterprises
B. To offer personal loans to individuals
C. To offer working capital loans up to ₹10 lakh to MSMEs
D. To provide subsidies to MSMEs
The MSME Credit Card offers **working capital loans up to ₹10 lakh**, simplifying access to funds for micro and small enterprises.
29. What is the focus of the 'PM Vishwakarma Kaushal Samman Yojana' launched in 2023?
A. Providing loans to large corporations
B. Supporting traditional artisans and craftspeople
C. Promoting digital startups
D. Offering tax exemptions to MSMEs
The 'PM Vishwakarma Kaushal Samman Yojana' focuses on **supporting traditional artisans and craftspeople** by providing skill development and financial assistance.
30. As of May 2025, how many MSMEs are registered on the Udyam Registration Portal and Udyam Assist Platform?
A. 5 crore
B. 6 crore
C. 7 crore
D. 6.44 crore
As of May 2025, **6.44 crore MSMEs** are registered on the Udyam Registration Portal and Udyam Assist Platform, reflecting the government's push for formalization and support.
