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      Question

      Under the MSMED Act, 2006, how is the classification of

      MSMEs determined?
      A Based on the number of employees Correct Answer Incorrect Answer
      B Based on investment in plant and machinery or equipment and turnover Correct Answer Incorrect Answer
      C Based on export turnover only Correct Answer Incorrect Answer
      D Based on the geographical location of the enterprise Correct Answer Incorrect Answer
      E Based on the annual profits of the enterprise Correct Answer Incorrect Answer

      Solution

      The classification of MSMEs is based on a composite criterion involving investment in plant and machinery or equipment and turnover. The investment and turnover limits determine whether an enterprise is classified as micro, small, or medium

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