Textbook Exercise Questions and Answers
I. Choose the Correct Answer
Question 1.
MSMED Act was enacted in the year ………………
(a) 2004
(b) 2007
(c) 2006
(d) 2008
Answer:
(c) 2006
Question 2.
MSMEs are important for the nation’s economy because they significantly contribute to ………………
(a) industrial production
(b) exports
(c) employment
(d) all the above
Answer:
(d) all the above
Question 3.
Self help groups convert the savings into a common fund known as ………………
(a) Common fund
(b) Group corpus fund
(c) Group fund
(d) none of the above
Answer:
(b) Group corpus fund
Question 4.
There are ……………… distinct modes of credit to Self Help Groups.
(a) 1
(b) 2
(c) 3
(d) 4
Answer:
(c) 3
Question 5.
Investment limit of a micro enterprise under manufacturing sector does not exceed ……………… lakhs.
(a) 10
(b) 20
(c) 25
(d) 50
Answer:
(c) 25
II. Very Short Answer Questions
Question 1.
What do you understand by the manufacturing enterprises?
Answer:
Manufacturing Enterprises refer to the enterprises engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951. The manufacturing enterprises are defined in terms of investment in plant and machinery.
Question 2.
Give some examples for micro enterprises.
Answer:
Micro enterprises are engaged in low scale activities such as clay pot making, fruits and vegetable vendors, transport (three wheeler tempos and autos), repair shops, cottage industries, small industries, handlooms, handicraft works etc.
Question 3.
What is the aim of NEEDS?
Answer:
Government of Tamil Nadu launched “New Entrepreneur – cum – Enterprise Development Scheme (NEEDS)” with a View to encouraging the educated youth to become the first generation entrepreneurs. The Scheme usages providing entrepreneurship development training to educated young entrepreneurs, preparing business plans and helping them to tie up with financial institutions to set up new business ventures besides linking them with major industrial clients.
Question 4.
What is a Self Help Group?
Answer:
Rural development is one of the main pillars of progress of India. It has lagged behind in many aspects of development even after six decades of the independence of India. Self Help Group has emerged as a new model for combating poverty.
Question 5.
State the investment limit for small enterprise in manufacturing and service sector.
Answer:
III. Short Answer Questions
Question 1.
State the investment limit for medium enterprise engaged in Manufacturing and service sector.
Answer:
Question 2.
List out the products produced by MSME in Tamil Nadu?
Answer:
In Tamil Nadu MSMEs sector produces a wide variety of products in almost all fields. The prominent among them are the textile, electronic products, engineering products, auto ancillaries, leather products, chemicals, plastics, garments, jewellery etc.
Question 3.
What is the role and significance of MSMEs in Indian Economy?
Answer:
Entrepreneurship is the key for economic development of any country. By empowering entrepreneur, MSME sector provides more employment opportunity to the people of India. It helps towards the industrialization of rural and backward areas. This sector reduces regional imbalance. It provides equality distribution of national’ income and wealth.
Question 4.
Explain any three features of Self Help Group.
Answer:
Question 5.
What are the different ways in which banks fund Self Help Groups?
Answer:
There are three distinct modes of credit to SHGs. Under the first mode, banks lend directly to the SHGs. In the second mode, banks provide loans to the NGOs for onward lending to the SHGs and ultimately to micro entrepreneurs. Under the third mode, banks extend credit to the SHGs with the NGOs serving as facilitators. Out of these three methods, the last method of direct lending by bank with NGOs facilitation is widely practised.
IV. Long Answer Questions
Question 1.
What is the definition of MSME?
Answer:
In accordance with the provisions of Micro, Small and Medium Enterprises Development Act 2006, the micro, small and medium enterprises are classified into two classes. Entrepreneurship is the key for economic development of any country By empowering entrepreneurs, MSME sector provides more employment opportunities to the people of India. It helps towards the industrialization of rural and backward areas. This sector reduces regional imbalances. It provides equitable distribution of national income and wealth.
A. Manufacturing Enterprises:
They refer to the enterprises engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951. The manufacturing enterprises are defined in terms of investment in plant and machinery.
B. Service Enterprises:
They refer to the enterprises engaged in providing or rendering of services.
Question 2.
Explain the advantages of MSMEs?
Answer:
Question 3.
What are the objectives of SHCs?
Answer:
Question 4.
Explain the advantages of MSME?
Answer:
The MSME Sector contributes about 8% to Gross Domestic Product (GDP) besides 45% to the total manufacturing output and 40% to the exports from the country on the production of more than 6000 products. This Sector consists of 36 million units and provides employment to over 8 crore peopte.
I. Choose the Correct Answer
Question 1.
Clay pot making industry is the best example for ……………………… enterprises.
a. Micro
b. Medium
c. Small
d. Large
Answer:
a. Micro
Question 2.
“Mahalir Thittam” project was launched during …………….
(a) 1997 – 98
(b)1999 – 99
(c) 1999 – 2000
(d) 2000 – 2001
Answer:
(a) 1997 – 98
II. Very Short Answer Questions
Question 1.
State the investment limit for microenterprises in the manufacturing and service sector.
Answer:
Question 2.
Expand MUDRA bank:
Answer:
Micro Units Development Refinance Agency Bank.
For Future Learning
Question a.
World Association of Small & Medium enterprises (WASME)
Answer:
WASME is a global non-profit organization. The headquarters is in Noida.
Question b.
Ministry of MSME and its functions.
Answer:
MSME – Micro, Small, Medium Enterprises.
Ministry: Ministry of MSME, a branch of the Government of India, is the apex body for the formulation and administration of rules, regulations, and laws relating to MSME in India.
Functions:
MSME: consequent to the increased globalization of the Indian economy and changing industrial environment. MSME is currently focusing on providing support in the fields of credit, marketing, technology, and infrastructure to MSME.