Module: General Practice
Q119: The "Small and Medium Enterprises Development Bill, 2005" eventually evolved into which landmark Act that currently governs the legal framework for MSMEs in India?
✅ Correct Answer: B
The MSMED Act, 2006 is the primary legislation governing the sector.
The bill was introduced in 2005 as the "Small and Medium Enterprises Development Bill, 2005." After review by the Parliamentary Standing Committee and amendments, it was passed and enacted as the MSMED Act, 2006, becoming operational on October 2, 2006.
This Act was significant because it introduced the concept of "Enterprise" (replacing the term "Industry"), integrated the Service sector into the definition, and defined the three-tier classification (Micro, Small, Medium) for the first time, replacing the old "Small Scale Industry" (SSI) nomenclature.
The bill was introduced in 2005 as the "Small and Medium Enterprises Development Bill, 2005." After review by the Parliamentary Standing Committee and amendments, it was passed and enacted as the MSMED Act, 2006, becoming operational on October 2, 2006.
This Act was significant because it introduced the concept of "Enterprise" (replacing the term "Industry"), integrated the Service sector into the definition, and defined the three-tier classification (Micro, Small, Medium) for the first time, replacing the old "Small Scale Industry" (SSI) nomenclature.