Mumbai: The Union Budget 2026-27 has placed Micro, Small and Medium Enterprises (MSMEs) at the heart of India’s development strategy. The government said MSMEs will play a key role in boosting economic growth, creating jobs and increasing exports.
Currently, MSMEs contribute about 35.4 percent to India’s manufacturing output, nearly 48.58 percnet to exports and around 31.1 percent to the country’s GDP. The sector has over 7.47 crore enterprises and provides jobs to more than 32.82 crore people. It is the second-largest employer after agriculture.
Rs 10,000 Crore SME Growth Fund
To help MSMEs expand and compete globally, the government has announced a Rs 10,000 crore SME Growth Fund.
The aim is to provide equity support and encourage strong businesses to grow into national and global champions.
In addition, the Self-Reliant India Fund, launched in 2021, will get an extra Rs 2,000 crore. As of November 30, 2025, this fund has supported 682 MSMEs with investments worth Rs 15,442 crore.
Improving Liquidity And Faster Payments
The Budget also focuses on improving liquidity for small businesses. More than Rs 7 lakh crore has already been unlocked through the Trade Receivables Discounting System (TReDS).
Now, Central Public Sector Enterprises will be required to use TReDS to clear payments to MSMEs. This step is expected to ensure faster payments and better cash flow.
Credit guarantee support through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) will also be extended for invoice discounting.
Better Market Integration
The government plans to link the Government e-Marketplace (GeM) with TReDS. This will improve data sharing with banks and financial institutions, helping MSMEs get loans more easily and at lower cost.
TReDS receivables may also be introduced as asset-backed securities to improve liquidity in the secondary market.
Overall, Budget 2026-27 aims to make MSMEs stronger, more competitive and globally connected.
