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Budget 2026 Fuels MSME Growth with Rs 10,000 Crore Fund & Liquidity Push

The Union Budget 2026-27 places MSMEs at the core of India's growth strategy, aiming to enhance their scale and global competitiveness. A central pillar is a three-pronged strategy featuring a new Rs 10,000 crore SME Growth Fund for equity support and an additional Rs 2,000 crore for the Self-Reliant India Fund. To improve liquidity, the government will mandate Central Public Sector Enterprises to use the TReDS platform for MSME payments and introduce TReDS receivables as asset-backed securities. These measures build on the sector's critical role, which contributes over 35% to manufacturing output and employs more than 32 crore people.

Key Points: Budget 2026: Rs 10,000 Cr SME Fund & TReDS Boost for MSMEs

  • Rs 10,000 crore SME Growth Fund
  • Mandatory TReDS for CPSU payments
  • Rs 2,000 crore top-up for Self-Reliant India Fund
  • TReDS receivables as asset-backed securities
2 min read

Union Budget focuses on strengthening MSMEs for scale, competitiveness and global reach

Union Budget 2026-27 unveils a Rs 10,000 crore SME Growth Fund, mandates TReDS for CPSUs, and expands credit to empower MSMEs for global competition.

"help MSMEs grow as champions by providing equity support, improving liquidity and strengthening access to professional expertise - Official Statement"

New Delhi, Feb 15

Placing Micro, Small and Medium Enterprises at the heart of India's growth strategy, the Union Budget 2026-27 has unveiled a comprehensive plan to help MSMEs scale up, compete globally and integrate deeper into domestic and international markets through financial, policy and professional support, according to the official statement on Sunday.

The Union Budget 2026-27 has underlined the government's commitment to strengthening Micro, Small and Medium Enterprises as key drivers of economic growth and employment.

MSMEs currently account for around 35.4 per cent of India's manufacturing output, nearly 48.58 per cent of exports and 31.1 per cent of the country's GDP.

With more than 7.47 crore enterprises employing over 32.82 crore people, the sector remains the second-largest employer after agriculture.

The Budget outlines three key "Kartavyas" aimed at accelerating growth, fulfilling the aspirations of citizens and building capacities across regions and communities.

Under the first Kartavya, a focused three-pronged strategy has been proposed to help MSMEs grow as champions by providing equity support, improving liquidity and strengthening access to professional expertise.

To boost equity support, the government has announced a dedicated Rs 10,000 crore SME Growth Fund.

The aim is to nurture future champions by incentivising eligible enterprises and supporting their expansion.

In addition, the Self-Reliant India Fund, launched in 2021, will receive an additional Rs 2,000 crore to continue supporting micro enterprises with risk capital.

As of November 30, 2025, the fund has supported 682 MSMEs with investments worth Rs 15,442 crore.

On the liquidity front, the government highlighted that more than ₹7 lakh crore has already been unlocked for MSMEs through the Trade Receivables Discounting System (TReDS).

To further strengthen the platform, it will now be made mandatory for Central Public Sector Enterprises to use TReDS for settling payments to MSMEs.

Credit guarantee support backed by CGTMSE will also be extended for invoice discounting on the platform.

The integration of GeM with TReDS is expected to enable better information-sharing with financiers, ensuring faster and cheaper access to credit.

The government also plans to introduce TReDS receivables as asset-backed securities to deepen the secondary market and improve liquidity.

- IANS

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Reader Comments

P
Priyanka N
Making TReDS mandatory for CPSEs is a game-changer! Delayed payments from large government buyers have crippled so many small businesses. If this ensures timely payments, it will solve a major cash flow problem. Kudos to the government for this practical step.
A
Aman W
While the focus on finance is good, I hope there is equal emphasis on easing compliance and providing market access. For a truly global reach, our MSMEs need help with branding, digital marketing, and navigating international trade regulations, not just funds.
S
Sarah B
The numbers are staggering - 7.47 crore enterprises! Supporting this massive ecosystem is crucial for inclusive growth. The integration of GeM with TReDS sounds like a smart tech solution to bridge information gaps for lenders. Hope it reaches the grassroots level.
K
Karthik V
Good intentions, but execution is key. The Self-Reliant India Fund has supported 682 MSMEs since 2021. That's a drop in the ocean considering the crores of enterprises. The new fund must have a simpler, faster disbursal process to make a real impact.
M
Meera T
As someone who runs a small handicraft export unit, the focus on global reach is encouraging. But competing internationally requires quality benchmarks and design innovation support too. Hope the 'professional expertise' part includes these aspects. Jai Hind! 🇮🇳

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