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    Question

    What is the main purpose of the Memorandum of

    Understanding (MoU) signed between the Ministry of Defence and the National Stock Exchange of India Limited (NSE) on July 29, 2024?
    A To exclude MSMEs from participating in the defence sector Correct Answer Incorrect Answer
    B To provide capital market access to MSMEs in the defence sector through the NSE Emerge platform Correct Answer Incorrect Answer
    C To reduce the number of MSMEs operating in the defence sector Correct Answer Incorrect Answer
    D To solely focus on regulatory compliance without capital raising Correct Answer Incorrect Answer
    E To establish NSE as a regulatory body for the defence sector Correct Answer Incorrect Answer

    Solution

    The MoU signed between the Ministry of Defence and the National Stock Exchange (NSE) on July 29, 2024, primarily aims to provide capital market access to Micro, Small, and Medium Enterprises (MSMEs) within the defence sector. This access is facilitated through the NSE Emerge platform, which offers MSMEs innovative options for raising equity capital from a diverse range of investors, thereby enabling these enterprises to raise capital efficiently and transparently. The initiative is crucial as it supports MSMEs in scaling up their business operations, exploring new markets, and funding research and development activities, all of which are vital for the growth and sustainability of the defence sector. Over the five-year duration of the MoU, the Department of Defence Production (DDP) and NSE will conduct various awareness programs such as seminars, workshops, and roadshows to educate MSMEs about capital raising and regulatory compliance, thus ensuring a comprehensive support framework for these enterprises. This strategic collaboration highlights a significant step towards integrating smaller businesses into the broader national defence production ecosystem.

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