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Rs 10,000 Crore SME Fund Unveiled to Forge Future Champions

Finance Minister Nirmala Sitharaman has proposed a dedicated Rs 10,000 crore SME growth fund to create future job champions. The budget also includes a Rs 2,000 crore top-up for an existing micro-enterprise fund and a four-point plan to enhance MSME financing through the TREDS platform. Public capital expenditure is set to increase to Rs 12.2 lakh crore for the upcoming financial year. The proposals were outlined alongside an Economic Survey projecting India's GDP growth between 6.8% and 7.2% for 2026-27.

Key Points: Rs 10,000 Crore SME Growth Fund Proposed in Budget

  • Rs 10,000 crore SME growth fund
  • Rs 2,000 crore top-up for self-reliant India fund
  • Four measures to boost MSME financing via TREDS
  • Capital expenditure raised to Rs 12.2 lakh crore
  • GDP growth projected at 6.8-7.2%
3 min read

Finance Minister proposes to introduce dedicated SME growth fund worth Rs 10,000 crore

Finance Minister Nirmala Sitharaman proposes a dedicated Rs 10,000 crore SME fund and outlines a four-point plan to boost MSME financing and growth.

"I propose to introduce a dedicated 10,000 crores SME growth fund to create future champions - Nirmala Sitharaman"

New Delhi, February 1

The Finance Minister of India, Niramala Sitharaman, has proposed to introduce a dedicated 10,000 crores SME growth fund to create future jobs, incentivising enterprises based on select criteria. She stated that the government recognises MSMEs as a vital engine of growth, and proposes a three-pronged approach to help them grow as champions. Equity support.

"I propose to introduce a dedicated 10,000 crores SME growth fund to create future champions, incentivising enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with 2,000 crores to continue support to micro-enterprises and maintain their access to risk capital," she said.

More than Rs 7 lakh crore has been made available to MSMEs through liquidity support.

"To leverage its full potential, I propose four measures. One: mandate TREDS as the transaction settlement platform for all purchases from MSMEs by CPSEs. Survey as a benchmark for other corporates. Two: introduce a credit guarantee support mechanism through CGT-MSC for invoice discounting on the TREDS platform. Three: link GEN with TREDS for sharing information with financiers about government purchases from SMEs, encouraging cheaper and quicker financing. Four: Introduce TREDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions," The Minister said.

Sitharaman also noted that the government shall continue to focus on developing infrastructure in cities with over 5 lakh population, that is, Tier II and Tier III cities, which are expanded to become growth centres.

Public capital expenditure has increased manifold from Rs 2 lakh crore in 2014-15 to an allocation of Rs 11.2 lakh crore. In this coming year, that is, this financial year 2026-27, I propose to increase it to Rs 12.2 lakh crore to continue the momentum.

Finance Minister Sitharaman presented her record ninth consecutive Union budget today in the Parliament. On Thursday, Union Finance Minister Nirmala Sitharaman tabled the Economic Survey of India in Parliament for the financial year 2025-26.

The tabling of the Economic Survey ahead of the Budget follows the long-standing tradition of outlining the state of the economy before detailing future fiscal plans. The document provided a comprehensive, data-backed review of the economy's performance over the previous year and offers a broad roadmap for future policy direction. As the government's flagship annual report, it reviews key economic developments over the past 12 months.

India's real GDP growth for 2026-27 is projected in the range of 6.8-7.2 per cent, reflecting sustained medium-term growth capacity amid a challenging global environment.

India recorded the lowest inflation rate since the beginning of the CPI series, with April-December 2025 average headline inflation coming in at 1.7 per cent, attributing to general disinflationary trend in food and fuel prices. Looking ahead, the inflation outlook remains benign, supported by favourable supply side conditions and the gradual pass-through of GST rate rationalisation.

- ANI

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Reader Comments

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Priyanka N
The intent is good, but the execution will be key. We've seen funds announced before, but the actual disbursement to deserving small businesses is often slow and mired in bureaucracy. I hope the "select criteria" are transparent and not just for well-connected firms. Let's wait and see the fine print.
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Aman W
Linking GEN with TREDS for invoice discounting is a brilliant technical step. If implemented well, it can solve the perennial problem of delayed payments from government departments, which is the lifeblood of many SMEs. This could improve cash flow dramatically. Good to see data-driven policy.
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Sarah B
The macroeconomic numbers are impressive – low inflation and sustained GDP growth projections. This creates a stable environment for businesses to invest. The increased capex to ₹12.2 lakh crore should also boost demand for MSME products in infrastructure projects. A holistic budget approach.
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Karthik V
Hope this fund also reaches the true micro-enterprises and artisans, not just the slightly larger SMEs. The ₹2000 crore top-up for the self-reliant India fund is a welcome step for that. Jai Hind! 🇮🇳 Our small businesses are the backbone of the economy.
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Michael C
Creating a secondary market for SME receivables as asset-backed securities is a sophisticated financial market reform. It shows the government is thinking long-term about deepening India's capital markets to support the real economy. This could attract institutional investors to the MSME sector.

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