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Budget 2026–27 targets MSMEs with Rs 100 billion boost and TReDS push
Industry News- Feb 02,26
Budget rolls out a Rs 100 billion MSME fund and TReDS reforms to improve equity, liquidity and compliance.
In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman announced a dedicated SME Growth Fund of Rs 100 billion, positioning micro, small and medium enterprises (MSMEs) as a central pillar of India’s growth strategy. Presenting the Budget in Parliament, Sitharaman said the government, led by Narendra Modi, has consistently prioritised action over rhetoric and reforms over populism, with a clear focus on people-led development.
The Budget is guided by three kartavya, with the first aimed at accelerating and sustaining economic growth by enhancing productivity, competitiveness and resilience amid volatile global conditions. Within this framework, MSMEs are recognised as a vital engine of growth, employment and innovation, and are being supported through a three-pronged approach covering equity, liquidity and professional assistance.
Under equity support, the Finance Minister introduced the Rs 100 billion SME Growth Fund to create future MSME champions, incentivising enterprises based on select performance and scale criteria. In addition, the Self-Reliant India Fund, set up in 2021, will be topped up with Rs 20 billion to continue providing risk capital to micro enterprises and to maintain their access to equity financing.
Liquidity support forms the second pillar of the MSME strategy. Sitharaman noted that the Trade Receivables Discounting System (TReDS) has already enabled more than Rs 7 trillion of financing for MSMEs. To unlock its full potential, the Budget proposes four measures. These include mandating TReDS as the transaction settlement platform for all purchases from MSMEs by central public sector enterprises, setting a benchmark for wider corporate adoption. A credit guarantee mechanism through the Credit Guarantee Fund Trust for Micro and Small Enterprises will be introduced to support invoice discounting on TReDS, reducing risk for financiers.
Further, the Government e-Marketplace will be linked with TReDS to share information on government purchases from MSMEs with lenders, enabling quicker and cheaper financing. In a move aimed at deepening market liquidity, TReDS receivables will be introduced as asset-backed securities, helping develop a secondary market and improving settlement efficiency.
The third element of the MSME strategy focuses on professional support. The government will facilitate professional bodies such as ICAI, ICSI and ICMAI to design short-term, modular courses and practical tools to create a cadre of ‘Corporate Mitras’, particularly in Tier-II and Tier-III towns. These accredited para-professionals will assist MSMEs in meeting compliance requirements at affordable costs, easing regulatory burdens and improving formalisation.
Together, the measures outlined in the Union Budget 2026–27 aim to strengthen MSMEs across the value chain by improving access to equity, ensuring timely liquidity and building affordable professional capacity, reinforcing their role as drivers of inclusive and sustainable economic growth.
MSMEs
Union Budget 2026–27
SME Growth Fund
TReDS
CGTMSE
GeM
Liquidity Support
Corporate Mitras
Nirmala Sitharaman
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