In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman unveiled a ₹10,000 crore MSME (Micro, Small and Medium Enterprises) Growth Fund aimed at strengthening and future-proofing the sector against global headwinds, including tariff pressures and economic uncertainties.
The new Growth Fund is part of a broader three-pronged strategy to nurture MSMEs into future champions by providing targeted equity support, improving liquidity, and offering professional and compliance assistance — all designed to boost competitiveness, innovation and long-term scaling potential.
Key Features of the MSME Support Package
🔹 Dedicated ₹10,000 Crore Growth Fund
The Budget proposes a dedicated SME Growth Fund with ₹10,000 crore to incentivise promising enterprises based on predefined performance criteria, helping them scale up, innovate and compete in global markets.
🔹 Self-Reliant India Fund Top-Up
To ensure continued access to risk capital for micro-enterprises, the government also announced a ₹2,000 crore top-up to the Self-Reliant India Fund (launched in 2021).
🔹 Enhanced Liquidity via TReDS Reforms
Finance Minister Sitharaman highlighted that over ₹7 lakh crore of liquidity has been made available to MSMEs through the Trade Receivables Discounting System (TReDS) so far. To deepen impact, several reforms were proposed:
- Mandating TReDS as the settlement platform for MSME receivables by central public-sector enterprises.
- Introducing credit-guarantee support through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for invoice discounting.
- Linking the Government e-Marketplace (GeM) with TReDS to speed up financing.
- Developing TReDS receivables as asset-backed securities to unlock fresh liquidity and create a secondary market.
🔹 Professional Support and Compliance Aid
The Budget also announced collaboration with professional bodies like the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and Institute of Cost Accountants of India (ICMAI) to design short-term modular courses and tools. This initiative aims to develop a cadre of “Corporate Mitras” — paraprofessionals who will help MSMEs meet compliance and regulatory requirements affordably, especially in Tier-II and Tier-III towns.
Why It Matters
MSMEs are a critical pillar of the Indian economy, driving employment generation, manufacturing output and exports. Proactively supporting the sector — through capital, liquidity and structural reforms — is expected to help Indian small enterprises navigate global tariff challenges, scale operations, adopt new technologies, and integrate deeper into global value chains.
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