New Delhi, Jan 7
Business chamber PHDCCI has, as part of its wishlist for Union Budget 2026-27, sought easier access to finance at lower interest rates and a reduction in the regulatory burden, to cut costs for the MSME sector, which is driving growth and employment generation in the economy.
Micro, Medium and Small Enterprises (MSMEs) hold the key to catapulting India's economy to a 10 per cent growth path, according to a statement issued by the PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday.
The MSME sector's contribution to manufacturing, exports and employment generation in the country has shown an increasing trend. In 2025, the sector contributed as much as 30 per cent to manufacturing output and has emerged as the second-largest employer next only to agriculture, it added.
More than 7.30 crore small and micro enterprises have registered on the Udyam Registration Portal and Udyam Assist Platform (UAP), from July 2020 to December 2025, bringing them into the organised sector ambit. This trend holds the key to initiating targeted policies and schemes in a structured way, the statement said.
"Put together, our Union Budget 2026-27 proposals present a comprehensive policy package aimed at easy access to finance for growth, reducing regulatory burdens, and strengthening much-needed institutional support for MSMEs," PHDCCI CEO & Secretary General, Ranjeet Mehta, said.
The business chamber has sought reintroduction of an interest subvention scheme for MSMEs with a 2 per cent interest subsidy on new and incremental loans from banks and NBFCs to bring down the cost of credit for the sector. This is expected to enhance global competitiveness amid the current geopolitical volatility.
The chamber has also stated that the costs of projects have gone up since the Pradhan Mantri MUDRA Yojana started in 2015; therefore, loan limits should be revised upwards under the scheme.
It further stated that in order to cushion MSME exporters amid rising global tariff pressures, the Interest Equalisation Scheme on pre- and post-shipment export credit should be reintroduced. This includes extending eligibility to service exporters, alongside manufacturing exporters, to broaden the export support basket for improving price competitiveness in global markets.
The business chamber also observed that to grow at a faster rate, MSMEs require cheaper financing options. To do so, money from the Fund of Funds in the form of equity should be infused, especially for startups and will cater to seed capital requirements for these startups.
The PHDCCI has also pointed out that under the MSME Development Act, 2006, only small businesses can approach Facilitation Councils to get help with payments that are late, and this help should also be available to medium-sized businesses that need this protection too.
In order to fast-track the adoption of modern, green, and eco-friendly technologies, the Credit-Linked Capital Subsidy Scheme should be enhanced with an investment ceiling of Rs 2 crore, up from the limit of Rs 1 crore, as it no longer reflects current technology costs.
Besides, the chamber has sought amendments to Section 44AB of the Income Tax Act to exempt all micro enterprises with turnover up to Rs 10 crore from mandatory tax audits, irrespective of profit margins. This is expected to reduce compliance costs, estimated at Rs 75,000-Rs 1.5 lakh annually.
- IANS
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