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Union Finance Minister Nirmala Sitharaman, presenting the budget in Parliament for the ninth consecutive time, unveiled several key measures to strengthen the MSME (Micro, Small, and Medium Enterprises) sector. In Budget 2026, alongside initiatives for women, farmers, and employment generation, the government announced a dedicated ₹10,000 crore SME Growth Fund and an additional ₹2,000 crore allocation to the Atmanirbhar Bharat Fund to support small and medium enterprises, considered the backbone of India’s economy.
Speaking in Parliament, the Finance Minister said the government is guided by three primary duties, the foremost being to accelerate and sustain economic growth. She emphasized that the government’s first duty is to maintain economic stability and strengthen productivity and competitiveness amid global uncertainties. In this context, MSMEs were highlighted as a key driver of growth, and a three-pronged strategy has been proposed to support their development.
10,000 Crore Equity Support for MSMEs
As part of the first step, Finance Minister Sitharaman proposed a dedicated ₹10,000 crore equity fund for MSMEs to nurture future champions based on select performance criteria. Additionally, the 2021-established Atmanirbhar Bharat Fund will receive an extra ₹2,000 crore to ensure small enterprises have access to support and risk capital.
Over ₹7 Lakh Crore Financial Availability
The Minister also highlighted that MSMEs have access to more than ₹7 lakh crore in financial facilities. To ensure maximum utilization of this capacity, four key measures have been proposed:
1.Mandating public sector enterprises to use the TReDS platform for all MSME-related procurements.
2.Introducing a credit guarantee support mechanism through CGTMSE for invoice discounting on TReDS.
3.Linking GEM with TReDS to share information about government procurements with financiers.
4.Presenting trade receivables as asset-backed securities to strengthen a secondary market.
These measures aim to improve cash flow, promote financial discipline, and create a robust secondary market for MSMEs.
Special Focus on Tier-2 and Tier-3 Cities
To strengthen business support, the government plans to develop a group of ‘Corporate Mentors’ in Tier-2 and Tier-3 cities. With the help of professional institutions such as ICAI, ICSI, and ICMAI, short-term modular courses and practical tools will be designed to help semi-professional MSMEs comply with regulations at a lower cost.
Overall, Budget 2026–27 positions MSMEs at the center of India’s economic growth strategy, aiming to enhance competitiveness, generate employment, and promote entrepreneurship. These initiatives are expected to not only strengthen the MSME sector but also contribute to a resilient and self-reliant Indian economy.
