Consider the following statements with reference to India : 1. According to the 'Micro, Small and Medium Enterprises Development (MSMED) Act, 2006', the 'medium enterprises' are those with investments in plant and machinery between ₹ 15 crore and ₹ 25 crore. 2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector. Which of the statements given above is/are correct?

Answer: B. Only Statement 2 is correct. Statement 1 is WRONG. The MSMED Act 2006 was AMENDED in 2020 with revised classification criteria. Under the amended definition: - Micro: investment up to Rs 1 crore AND turnover up to Rs 5 crore - Small: investment up to Rs 10 crore AND turnover up to Rs 50 crore - Medium: investment up to Rs 50 crore AND turnover up to Rs 250 crore The OLD definition had different thresholds and the question's stated range (Rs 15-25 crore) does not match either old or new criteria. The statement is wrong as worded. Statement 2 is CORRECT. All bank loans to MSMEs qualify under PRIORITY SECTOR LENDING (PSL) per RBI guidelines. Banks must achieve specific PSL targets, and MSME loans count toward the overall 40% PSL requirement (75% for foreign banks with limited branches). This boosts credit availability to MSMEs. Source: MSMED Act 2006 (amended 2020) / RBI Master Direction on Priority Sector Lending.