The Union Budget 2026–27 emphasizes empowering Micro, Small, and Medium Enterprises (MSMEs) to drive India’s growth by providing them with support to expand globally and tap into domestic and international markets. MSMEs play a significant role in India’s economy, contributing 35.4% to manufacturing output, 48.58% to exports, and 31.1% to GDP. With over 7.47 crore enterprises employing 32.82 crore people, they are the second-largest employer in India after agriculture.
The budget introduces three key initiatives, known as “Kartavyas,” to accelerate growth, meet citizen aspirations, and enhance capacities across regions. The first initiative focuses on helping MSMEs become industry leaders by offering equity support, enhancing liquidity, and improving access to professional expertise. A dedicated Rs 10,000 crore SME Growth Fund aims to nurture potential champions by incentivizing eligible enterprises and supporting their growth.
To further support MSMEs, the Self-Reliant India Fund, established in 2021, will receive an additional Rs 2,000 crore to provide risk capital to micro enterprises. The government has already unlocked over ₹7 lakh crore for MSMEs through the Trade Receivables Discounting System (TReDS) and plans to make it mandatory for Central Public Sector Enterprises to use TReDS for payments to MSMEs. Additionally, credit guarantee support for invoice discounting on the platform will be extended by CGTMSE.
The integration of Government e-Marketplace (GeM) with TReDS is expected to facilitate better information-sharing with financiers, ensuring quicker and more affordable access to credit. The government also aims to introduce TReDS receivables as asset-backed securities to enhance the secondary market and boost liquidity.
