UPSC Prelims Practice Questions — Union Budget 2026-27: Building Champion MSMEs for a Global India
Q1. The statutory basis for the classification of enterprises into micro, small and medium categories, upon which the composite investment-cum-turnover criterion is applied, is provided by which one of the following?
- A. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
- B. The Industries (Development and Regulation) Act, 1951
- C. The Companies Act, 2013
- D. The Factories Act, 1948
Q2. Following the revision effective 1 April 2025, what is the enhanced investment-in-plant-and-machinery ceiling for a Medium enterprise, the highest among the three MSME categories?
- A. ₹50 crore
- B. ₹75 crore
- C. ₹125 crore
- D. ₹250 crore
Q3. Under the 'professional support' pillar of Union Budget 2026-27, the cadre of 'Corporate Mitras' to help MSMEs meet compliance requirements is to be developed by facilitating which set of institutions?
- A. ICAI, ICSI and ICMAI
- B. SEBI, RBI and IRDAI
- C. NABARD, SIDBI and MUDRA
- D. NITI Aayog, ICAR and IIFT
Q4. After the enhancement made in Budget 2025-26, which category enjoys the highest credit guarantee cover, doubled to the largest ceiling under the scheme?
- A. Micro enterprises, at ₹5 crore
- B. Well-run startups, at ₹20 crore
- C. Small enterprises, at ₹10 crore
- D. Medium enterprises, at ₹100 crore
Q5. With reference to the credit-guarantee enhancements introduced in Budget 2025-26 for MSMEs and startups, consider the following statements:
1. The credit guarantee cover for micro and small enterprises was enhanced from ₹5 crore to ₹20 crore.
2. For startups, the guarantee cover was doubled from ₹10 crore to ₹20 crore.
3. Startups availing loans in 27 identified priority sectors were offered a reduced guarantee fee of 1%.
Which of the statements given above is/are correct?
- The credit guarantee cover for micro and small enterprises was enhanced from ₹5 crore to ₹20 crore.
- For startups, the guarantee cover was doubled from ₹10 crore to ₹20 crore.
- Startups availing loans in 27 identified priority sectors were offered a reduced guarantee fee of 1%.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q6. With reference to the MSME sector's contribution to the Indian economy as cited alongside Union Budget 2026-27, consider the following statements:
1. MSMEs account for about 35.4% of India's manufacturing output.
2. MSMEs contribute about 48.58% of India's exports.
3. MSMEs account for nearly 45% of India's GDP.
4. MSMEs are India's second-largest employer after agriculture.
Which of the statements given above is/are NOT correct?
- MSMEs account for about 35.4% of India's manufacturing output.
- MSMEs contribute about 48.58% of India's exports.
- MSMEs account for nearly 45% of India's GDP.
- MSMEs are India's second-largest employer after agriculture.
- A. 1 and 3
- B. 3 only
- C. 2 and 4
- D. 1, 2 and 4
Q7. As repositioned in Union Budget 2026-27, the MSME sector — engaging over 32.82 crore persons — is recognised as India's second-largest source of employment, next only to which one of the following sectors?
- A. Agriculture
- B. Construction
- C. Textiles
- D. Information technology services
Q8. The complete removal of the ₹10 lakh per-consignment cap on courier exports, effective 1 April 2026, was operationalised through regulatory amendments by which one of the following bodies?
- A. Central Board of Indirect Taxes and Customs (CBIC)
- B. Directorate General of Foreign Trade (DGFT)
- C. Central Board of Direct Taxes (CBDT)
- D. Reserve Bank of India (RBI)
Q9. With reference to the CBIC's e-commerce and courier trade reforms operationalised from 1 April 2026, consider the following:
1. Complete removal of the ₹10 lakh per-consignment value cap on courier exports.
2. A risk-based approach for re-import of returned or rejected goods, replacing consignment-wise verification.
3. A dedicated return module developed in the Express Cargo Clearance System.
4. Imposition of a flat 5% export duty on all B2C courier shipments.
Which of the statements given above is/are correct?
- Complete removal of the ₹10 lakh per-consignment value cap on courier exports.
- A risk-based approach for re-import of returned or rejected goods, replacing consignment-wise verification.
- A dedicated return module developed in the Express Cargo Clearance System.
- Imposition of a flat 5% export duty on all B2C courier shipments.
- A. 1, 2 and 3
- B. 2 and 4
- C. 1 and 3 only
- D. 1, 2, 3 and 4
Q10. With reference to the institutional architecture underpinning India's MSME policy and financing, consider the following statements:
1. The Ministry of Micro, Small and Medium Enterprises is the nodal ministry for MSME policy.
2. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a joint initiative of the Government of India and SIDBI.
3. TReDS is an electronic platform operating under guidelines issued by the Reserve Bank of India.
4. The mother fund of the Self-Reliant India (SRI) Fund is operated by NABARD.
Which of the statements given above is/are NOT correct?
- The Ministry of Micro, Small and Medium Enterprises is the nodal ministry for MSME policy.
- The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a joint initiative of the Government of India and SIDBI.
- TReDS is an electronic platform operating under guidelines issued by the Reserve Bank of India.
- The mother fund of the Self-Reliant India (SRI) Fund is operated by NABARD.
- A. 4 only
- B. 1 and 4
- C. 3 only
- D. 2 and 4
Q11. The Self-Reliant India (SRI) Fund, launched under the Atmanirbhar Bharat package to provide equity funding to growth-potential MSMEs, is operated through a mother fund managed by which one of the following?
- A. NSIC Venture Capital Fund Limited, a subsidiary of the National Small Industries Corporation (NSIC)
- B. SIDBI Venture Capital Limited
- C. The National Bank for Agriculture and Rural Development (NABARD)
- D. The Small Industries Development Bank of India (SIDBI), directly