The government has announced the creation of a Rs 10,000 crore MSME Growth Fund in Budget 2026-27 to provide equity support to micro, small and medium enterprises.
Presenting the Union Budget, Finance Minister Nirmala Sitharaman said the MSME sector is central to India’s economic framework and will be positioned as a future growth driver through targeted financial and institutional support.
The proposed MSME Growth Fund will focus on providing equity capital to small and medium enterprises, reducing reliance on debt financing. The government said the fund will strengthen balance sheets and support long-term sustainable expansion.
The Budget also outlined measures to enhance liquidity support through the Trade Receivables Discounting System (TReDS). The platform will be expanded to facilitate timely payments to MSMEs, with financial support exceeding Rs 7 lakh crore expected to be routed through the system.
To strengthen market access, the government announced a new mechanism for direct procurement from MSMEs. The initiative aims to increase participation of small enterprises in government purchases and reduce intermediary involvement.
A dedicated SME Development Fund of Rs 10,000 crore was also announced to provide equity assistance to enterprises for technology adoption, capacity expansion and market development.
In addition, the government will infuse an extra Rs 2,000 crore into the Aatmanirbhar Bharat Kosh to support MSMEs and startups through equity financing and reduce external dependence.
The Budget introduced a new ‘Corporate Mitra’ cadre in Tier 2 and Tier 3 cities to provide professional assistance to MSMEs in taxation, compliance, accounting and legal processes at lower costs.
The government said compliance procedures for MSMEs will be simplified with the support of Corporate Mitras, enabling timely regulatory adherence and reducing penalties and legal burdens.
The Finance Minister also outlined three core objectives under the Viksit Bharat vision, focusing on productivity growth, employment generation and inclusive development, with MSMEs positioned as a key contributor.
The Budget further announced Semiconductor Mission 2.0, under which incentives will be provided for new semiconductor manufacturing units. The initiative is expected to strengthen domestic supply chains and support both MSMEs and large companies.
The measures announced in Budget 2026 are expected to impact employment generation and industrial growth across the MSME sector.
