UPSC Prelims Practice Questions — Rajya Sabha passes Bill on MSMEs amid Opposition protests

Q1. With reference to the changes made by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 to the parent MSMED Act, 2006, consider the following statements: Which of the statements given above is/are correct?

  1. The Bill makes the filing of a memorandum voluntary for all categories of enterprises and provides that the central government shall notify a digital platform for the purpose, while state governments may also notify such a platform.
  2. For contraventions such as furnishing false information at the time of registration, the Bill designates the Micro and Small Enterprises Facilitation Council as the adjudicating officer, with appeals lying to the Development Commissioner.
  3. The Bill empowers the central government to specify, by notification, the thresholds for classifying enterprises, retaining investment in plant and machinery or equipment and turnover as the twin criteria.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. Under the dispute-resolution timelines introduced by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, mediation in a delayed-payment dispute must be completed within how many days from the date of first appearance of the parties?

  • A. 30 days
  • B. 45 days
  • C. 90 days
  • D. 180 days

Q3. With reference to the classification of enterprises under the limits made effective from 1 April 2025, consider the following enterprises: Which of the above is/are correctly identified?

  1. An enterprise with investment of Rs 2 crore in plant and machinery and turnover of Rs 9 crore — a micro enterprise.
  2. An enterprise with investment of Rs 30 crore in plant and machinery and turnover of Rs 90 crore — a small enterprise.
  3. An enterprise with investment of Rs 100 crore in equipment and turnover of Rs 450 crore — a medium enterprise.
  4. An enterprise with investment of Rs 2 crore in equipment and turnover of Rs 12 crore — a micro enterprise.
  • A. 1 and 2
  • B. 1 and 3
  • C. 2, 3 and 4
  • D. 3 only

Q4. The enhanced investment and turnover limits for classifying enterprises as micro, small or medium, brought into effect from 1 April 2025, were operationalised through a notification issued by which one of the following?

  • A. Ministry of Micro, Small and Medium Enterprises
  • B. Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry
  • C. National Small Industries Corporation, a public sector enterprise under the administrative control of the Government of India
  • D. Ministry of Statistics and Programme Implementation, through its National Statistical Office

Q5. In the context of the Trade Receivables Discounting System, the term 'factoring unit' refers to which one of the following?

  • A. The standard nomenclature used on the platform for an invoice or bill of exchange placed for financing
  • B. The financier that quotes the lowest discount rate in the bidding process and thereby acquires the receivable
  • C. The minimum value of receivables an MSME seller must aggregate before it becomes eligible to seek discounting
  • D. The branch of the seller's working capital bank that certifies that no duplicate finance exists against the goods

Q6. TReDS platforms in India function on the basis of authorisation granted by which authority and under which law?

  • A. The Reserve Bank of India, under the Payment and Settlement Systems Act, 2007
  • B. The Reserve Bank of India, under the Factoring Regulation Act, 2011
  • C. The Securities and Exchange Board of India, under the Securities Contracts (Regulation) Act, 1956
  • D. The Ministry of MSME, under the Micro, Small and Medium Enterprises Development Act, 2006

Q7. Under Section 21 of the MSMED Act, 2006, a Micro and Small Enterprises Facilitation Council is to consist of how many members?

  • A. Not less than three but not more than five
  • B. Not less than five but not more than seven
  • C. Not less than two but not more than four
  • D. Exactly three, of whom two must represent industry associations

Q8. Under the MSMED Act, 2006, the expression 'appointed day', which is central to computing interest on delayed payments, means which one of the following?

  • A. The day immediately following the expiry of fifteen days from the day of acceptance or deemed acceptance of the goods or services
  • B. The day immediately following the expiry of forty-five days from the day of acceptance or deemed acceptance of the goods or services
  • C. The day on which the supplier makes a reference of the unpaid amount to the Micro and Small Enterprises Facilitation Council
  • D. The day on which the buyer records in writing its objection regarding acceptance of the goods delivered or services rendered

Q9. The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 was passed by the Rajya Sabha on 3 August 2026. Counting from the date on which it was introduced in that House, how many days did the Bill take to be passed?

  • A. 6 days
  • B. 11 days
  • C. 16 days
  • D. 21 days

Q10. The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 was piloted in the Rajya Sabha by which one of the following Union Ministers?

  • A. Jitan Ram Manjhi, Minister of Micro, Small and Medium Enterprises
  • B. Piyush Goyal, Minister of Commerce and Industry
  • C. H. D. Kumaraswamy, Minister of Heavy Industries and Steel
  • D. Nirmala Sitharaman, Minister of Finance and Corporate Affairs

Q11. With reference to the obligations relating to settlement of MSME invoices through TReDS, consider the following statements: Which of the statements given above is/are correct?

  1. Before the 2026 mandate, onboarding on TReDS was compulsory for companies with turnover above Rs 250 crore, a threshold that had been lowered from Rs 500 crore.
  2. Under the 2026 notification of the Ministry of MSME, operating central public sector enterprises must settle MSME invoices through RBI-authorised TReDS platforms and obtain statutory auditor certification of compliance during the annual audit.
  3. Unlike the earlier turnover-based onboarding requirement, the 2026 mandate applies only to those central public sector enterprises whose annual turnover exceeds Rs 500 crore.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q12. The share of MSME Gross Value Added in India's Gross Domestic Product, as placed before Parliament by the Ministry of MSME, is based on estimates prepared by which one of the following?

  • A. Ministry of Statistics and Programme Implementation
  • B. Office of the Development Commissioner (MSME), Ministry of Micro, Small and Medium Enterprises
  • C. National Small Industries Corporation, under the Ministry of Micro, Small and Medium Enterprises
  • D. Department of Economic Affairs, Ministry of Finance, through the Economic Survey