Q.Under the current MSME classification, an enterprise is placed in a class on the basis of:

The current rule is a composite one using two measures together, not just one.

The number of workers is not used, and neither investment nor turnover alone decides the class.

The current MSME classification (in force since 1 July 2020, with limits revised from 1 April 2025) uses a composite criterion — an enterprise's class depends on BOTH its investment in plant, machinery and equipment AND its annual turnover, with the same limits for manufacturing and service enterprises.

• (a) Investment only — incorrect. Investment alone was closer to the old (pre-2020) manufacturing rule; the current rule adds turnover as well.
• (b) Turnover only — incorrect. Turnover alone does not decide the class; investment must also be within the limit.
• (c) Both investment and turnover — correct. An enterprise must stay within both the investment and the turnover ceilings of a class; crossing either moves it to the next higher class.
• (d) Number of workers — incorrect. Employment (number of workers) is not part of the MSME classification criteria at all.

Do not pick 'number of workers' — while employment size is a common general way to describe firm size, it is NOT the legal basis of MSME classification in India. Also avoid choosing investment or turnover alone; the rule is composite.