UPSC Prelims Practice Questions — The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 passed by Parliament

Q1. The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 is described as having been passed by Parliament on 7 August 2026. This description is best explained by which one of the following?

  • A. Lok Sabha passed it on that date, Rajya Sabha having already passed it on 3 August 2026
  • B. Rajya Sabha passed it on that date, Lok Sabha having already passed it on 3 August 2026
  • C. Rajya Sabha both took it up and passed it on that date, Lok Sabha's assent being deemed thereafter
  • D. Both Houses passed it on that date at a joint sitting summoned after disagreement between them

Q2. The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 was introduced in which House of Parliament and in which session?

  • A. Rajya Sabha, during the Monsoon Session of 2026
  • B. Lok Sabha, during the Monsoon Session of 2026
  • C. Rajya Sabha, during the Budget Session of 2026
  • D. Lok Sabha, during the Budget Session of 2026

Q3. Under the graded penalty framework introduced by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, by what proportion of the minimum penalty do the prescribed penalties stand increased at the end of every three-year interval following the commencement of the amendment?

  • A. 5 per cent
  • B. 10 per cent
  • C. 15 per cent
  • D. 20 per cent

Q4. With reference to the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, how are the investment and turnover thresholds for classifying an enterprise as micro, small or medium henceforth to be laid down?

  • A. Fixed in a Schedule to the parent Act, alterable only by an amending Act passed by Parliament
  • B. Notified by the central government, the parent Act itself no longer specifying the figures
  • C. Notified by the Reserve Bank of India in consultation with the Ministry concerned
  • D. Determined by the State Governments through their Facilitation Councils

Q5. The Ministry of MSME's dedicated platform for formalising informal micro enterprises — including those without GST registration or outside the income-tax net — records such enterprises on the basis of verified data submitted by which one of the following?

  • A. District Industries Centres functioning under the State Governments concerned
  • B. The Office of the Development Commissioner (MSME) through its field institutes
  • C. Authorised partner agencies empanelled for the purpose by the Ministry
  • D. Micro and Small Enterprises Facilitation Councils constituted in the States and Union Territories

Q6. Consider the following statements regarding the Udyam registration architecture of the Ministry of Micro, Small and Medium Enterprises: 1. The Udyam Registration Portal offers a paperless, self-declaration based and free-of-cost online registration process. 2. The Udyam Registration Portal was launched on 1 July 2020. 3. Under the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, filing of the memorandum on the notified digital platform is compulsory for medium enterprises engaged in manufacturing and optional for the rest. 4. The Udyam Assist Platform, launched in January 2023, brings informal micro enterprises within the formal ambit so that they may avail benefits under Priority Sector Lending. Which of the above is/are NOT correct?

  1. The Udyam Registration Portal offers a paperless, self-declaration based and free-of-cost online registration process.
  2. The Udyam Registration Portal was launched on 1 July 2020.
  3. Under the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, filing of the memorandum on the notified digital platform is compulsory for medium enterprises engaged in manufacturing and optional for the rest.
  4. The Udyam Assist Platform, launched in January 2023, brings informal micro enterprises within the formal ambit so that they may avail benefits under Priority Sector Lending.
  • A. 1 and 3
  • B. 3 only
  • C. 2 and 4
  • D. 1, 2 and 4

Q7. Consider the following statements comparing the Micro, Small and Medium Enterprises Development Act, 2006 with the Amendment Bill of 2026 in respect of invoice settlement: 1. The Trade Receivables Discounting System is an electronic platform regulated by the Reserve Bank of India on which micro, small and medium enterprises raise funds from financiers against invoices due from buyers. 2. The Amendment Bill of 2026 requires every central public sector enterprise to settle all invoices for procurement of goods or services from MSMEs on the Trade Receivables Discounting System. 3. The parent Act of 2006, as originally enacted, obliged every buyer to route settlement of MSME invoices through the Trade Receivables Discounting System within forty-five days. Which of the statements given above is/are correct?

  1. The Trade Receivables Discounting System is an electronic platform regulated by the Reserve Bank of India on which micro, small and medium enterprises raise funds from financiers against invoices due from buyers.
  2. The Amendment Bill of 2026 requires every central public sector enterprise to settle all invoices for procurement of goods or services from MSMEs on the Trade Receivables Discounting System.
  3. The parent Act of 2006, as originally enacted, obliged every buyer to route settlement of MSME invoices through the Trade Receivables Discounting System within forty-five days.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q8. Consider the following statements about the invoice-settlement and award-enforcement provisions of the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026: 1. The obligation to settle invoices for MSME procurement on the Trade Receivables Discounting System extends to every central public sector enterprise. 2. The central and state governments may extend this settlement obligation to other public sector entities and authorities. 3. The platforms constituting the Trade Receivables Discounting System are authorised and regulated by the Securities and Exchange Board of India. 4. Where an application to set aside an arbitral award has remained pending beyond six months, the court is to release at least fifty per cent of the awarded amount to the supplier enterprise. Which of the above is/are NOT correct?

  1. The obligation to settle invoices for MSME procurement on the Trade Receivables Discounting System extends to every central public sector enterprise.
  2. The central and state governments may extend this settlement obligation to other public sector entities and authorities.
  3. The platforms constituting the Trade Receivables Discounting System are authorised and regulated by the Securities and Exchange Board of India.
  4. Where an application to set aside an arbitral award has remained pending beyond six months, the court is to release at least fifty per cent of the awarded amount to the supplier enterprise.
  • A. 1 and 3
  • B. 2 only
  • C. 3 only
  • D. 3 and 4

Q9. The following pairs of investment and turnover ceilings are claimed to be the classification limits for enterprises applicable with effect from 1 April 2025: 1. Micro enterprise — investment up to Rs 2.5 crore and turnover up to Rs 10 crore 2. Small enterprise — investment up to Rs 25 crore and turnover up to Rs 100 crore 3. Medium enterprise — investment up to Rs 125 crore and turnover up to Rs 250 crore 4. Micro enterprise — investment up to Rs 1 crore and turnover up to Rs 5 crore Which of the above is/are correctly identified?

  1. Micro enterprise — investment up to Rs 2.5 crore and turnover up to Rs 10 crore
  2. Small enterprise — investment up to Rs 25 crore and turnover up to Rs 100 crore
  3. Medium enterprise — investment up to Rs 125 crore and turnover up to Rs 250 crore
  4. Micro enterprise — investment up to Rs 1 crore and turnover up to Rs 5 crore
  • A. 1 and 3
  • B. 2 and 4
  • C. 1 and 2
  • D. 3 and 4

Q10. Under the classification limits in force since 1 April 2025, what is the highest annual turnover an enterprise may have and still fall within the MSME category?

  • A. Rs 100 crore
  • B. Rs 125 crore
  • C. Rs 250 crore
  • D. Rs 500 crore

Q11. Under the graded civil penalty regime substituted by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, an appeal against an order of the adjudicating officer lies to which authority?

  • A. The Development Commissioner, who also discharges the adjudicating function under the amended Act
  • B. The chairperson of the Micro and Small Enterprises Facilitation Council of the State concerned
  • C. The National Company Law Appellate Tribunal, which hears appeals in matters of corporate default
  • D. The Secretary in charge of the Ministry of Micro, Small and Medium Enterprises

Q12. Under the dispute resolution timelines laid down by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, within how many days of the termination of mediation must the dispute be referred to arbitration?

  • A. 15 days
  • B. 30 days
  • C. 45 days
  • D. 90 days