UPSC Prelims Practice Questions — FINANCE MINISTER NIRMALA SITHARAMAN INTRODUCES A DEDICATED ₹10,000 CRORE SME GROWTH FUND, TO CREATE FUTURE CHAMPIONS, INCENTIVIZING ENTERPRISES BASED ON SELECT CRITERIA

Q1. In the context of the Union Budget 2026-27, the 'SME Growth Fund' is best described as which one of the following?

  • A. A ₹10,000 crore fund providing equity support to incentivize high-potential MSMEs to become 'future champions' based on select criteria
  • B. A ₹10,000 crore interest-subvention corpus that lowers the effective lending rate on working-capital loans to micro enterprises
  • C. A ₹10,000 crore credit-guarantee reserve that indemnifies banks against defaults on collateral-free MSME term loans
  • D. A ₹10,000 crore export-incentive pool reimbursing MSMEs for freight and marketing costs in overseas markets

Q2. Under the 'Equity Support' pillar of the Building Champion MSMEs strategy in Union Budget 2026-27, which single measure carries the largest corpus?

  • A. The SME Growth Fund (₹10,000 crore)
  • B. The top-up to the Self-Reliant India (SRI) Fund (₹2,000 crore)
  • C. The CGTMSE credit-guarantee augmentation for invoice discounting
  • D. The asset-backed securities window on the TReDS platform

Q3. With reference to the three-pronged 'Building Champion MSMEs' strategy in Union Budget 2026-27, consider the following statements: 1. The equity pillar consists of the ₹10,000 crore SME Growth Fund together with a ₹2,000 crore top-up to the Self-Reliant India Fund. 2. The liquidity pillar is built around reforms to the Trade Receivables Discounting System (TReDS). 3. The professional-support pillar seeks to build a cadre of 'Corporate Mitras'. Which of the statements given above is/are correct?

  1. The equity pillar consists of the ₹10,000 crore SME Growth Fund together with a ₹2,000 crore top-up to the Self-Reliant India Fund.
  2. The liquidity pillar is built around reforms to the Trade Receivables Discounting System (TReDS).
  3. The professional-support pillar seeks to build a cadre of 'Corporate Mitras'.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. The cadre of 'Corporate Mitras' proposed under Union Budget 2026-27 is to be developed with the help of which set of professional institutions?

  • A. ICAI, ICSI and ICMAI
  • B. ICAI, SEBI and RBI
  • C. SIDBI, NABARD and IIBF
  • D. AICTE, UGC and NSDC

Q5. With reference to the Self-Reliant India (SRI) Fund, consider the following statements: 1. It was set up in 2021 and is structured as a mother-fund and daughter-fund arrangement. 2. Of its envisaged ₹50,000 crore corpus, ₹40,000 crore is contributed by the Government of India and ₹10,000 crore is raised from private equity/venture capital funds. 3. Its mother fund, NSIC Venture Capital Fund Limited (NVCFL), is registered as a Category-II Alternative Investment Fund with SEBI. Which of the statements given above is/are correct?

  1. It was set up in 2021 and is structured as a mother-fund and daughter-fund arrangement.
  2. Of its envisaged ₹50,000 crore corpus, ₹40,000 crore is contributed by the Government of India and ₹10,000 crore is raised from private equity/venture capital funds.
  3. Its mother fund, NSIC Venture Capital Fund Limited (NVCFL), is registered as a Category-II Alternative Investment Fund with SEBI.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q6. The Self-Reliant India (SRI) Fund, which received a ₹2,000 crore top-up in Union Budget 2026-27, was originally established in which year?

  • A. 2020
  • B. 2021
  • C. 2023
  • D. 2026

Q7. The Trade Receivables Discounting System (TReDS), whose reforms feature in Union Budget 2026-27, functions under the regulatory framework of which institution?

  • A. Reserve Bank of India
  • B. Securities and Exchange Board of India
  • C. Ministry of Micro, Small and Medium Enterprises
  • D. Small Industries Development Bank of India

Q8. Among the four TReDS measures proposed in Union Budget 2026-27, one mandates a particular class of buyers to use TReDS as the settlement platform for all their purchases from MSMEs, to serve as a benchmark for other corporates. This class of buyers is:

  • A. Central Public Sector Enterprises (CPSEs)
  • B. State Public Sector Undertakings
  • C. All scheduled commercial banks
  • D. All stock-exchange-listed private companies

Q9. Under the MSME Champions Scheme, the component branded 'ZED' refers to which one of the following?

  • A. MSME-Sustainable certification promoting 'Zero Defect Zero Effect' production to enhance quality and minimise environmental impact
  • B. A zero-duty export entitlement extended to registered medium enterprises
  • C. A digital 'zero-paperwork' single-window registration portal for enterprises
  • D. A zero-interest emergency credit line for enterprises in distress

Q10. Consider the following: 1. MSME-Sustainable (ZED) 2. MSME-Competitive (LEAN) 3. MSME-Innovative (Incubation, Design & IPR) 4. MSME-SAMADHAAN Which of the above is/are correctly identified as component(s) of the MSME Champions Scheme?

  1. MSME-Sustainable (ZED)
  2. MSME-Competitive (LEAN)
  3. MSME-Innovative (Incubation, Design & IPR)
  4. MSME-SAMADHAAN
  • A. 1, 2 and 3
  • B. 2, 3 and 4
  • C. 1 and 4 only
  • D. 1, 2, 3 and 4

Q11. Under the revised MSME classification effective 1 April 2025, the investment in plant and machinery or equipment for a MICRO enterprise must not exceed how many crore rupees?

  • A. ₹1 crore
  • B. ₹2.5 crore
  • C. ₹5 crore
  • D. ₹10 crore

Q12. Although the SME Growth Fund was announced by the Ministry of Finance, which ministry serves as the nodal ministry for the MSME ecosystem and implements schemes such as the Champions Scheme and (with SIDBI) the CGTMSE credit guarantee?

  • A. Ministry of Micro, Small and Medium Enterprises
  • B. Ministry of Finance, which solely handles all MSME programmes
  • C. Ministry of Commerce and Industry
  • D. Ministry of Corporate Affairs