Banking · MSME Sector

Examine the following statements concerning the Micro, Small, and Medium Enterprises (MSME) sector's contribution and the government's support mechanisms: 1. The MSME sector's high contribution to India's GDP, employment, and exports is directly proportional to its equally high share of credit from the formal banking sector, indicating minimal credit gap. 2. Under the RBI's guidelines, loans to all categories of MSMEs (Micro, Small, and Medium) are eligible for Priority Sector Lending (PSL) classification, regardless of their annual turnover. 3. The Udyam Registration is mandatory for all enterprises seeking to avail benefits under the MSMED Act, 2006, and the classification is dynamically updated based on the GST-linked annual turnover. 4. One of the main challenges faced by MSMEs is the high rate of Non-Performing Assets (NPA) in the sector, often due to a lack of formal accounting practices and undercapitalization. 5. The TReDS (Trade Receivables Discounting System) platform was introduced by the RBI to facilitate financing of trade receivables for MSMEs, thereby addressing the crucial issue of delayed payments. 6. The government's procurement policy mandates that Central Ministries and Public Sector Undertakings (PSUs) must procure at least 25 percent of their total annual purchase value from Micro and Small Enterprises (MSEs). 7. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme provides 100 percent guarantee cover for all collateral-free credit extended to Micro and Small Enterprises, irrespective of the loan amount.